The foreign exchange market – Forex




The forex market is the trading place for international foreign exchange. This is mainly about swapping, buying and selling foreign currencies. The term itself is made up of for (Eign) EX (change) and is a name of the type. The investor cannot perform on the forex itself. There is a need for a broker.


The history of the foreign exchange market
In the past, the currencies were tied to the gold reserves of the countries. Wars and economic crises led to an ever-increasing amount of money and a gold bond was no longer possible. Fixed exchange rates could no longer be maintained. Trading in currencies began and the foreign exchange market developed. The computer age has revolutionized this trade. The technology is used to trade trillions of euros a day.


Trading Places for foreign exchange trading
In the course of its development, foreign exchange trading has essentially been placed on a number of main centres. These are distributed around the globe. In addition, the majority of the currencies of the most important industrial nations are traded. The trading centers are London, New York, Zurich, Frankfurt and Tokyo. Here, the US dollar, the Canadian dollar, the euro, the Swiss franc, the British pound and the Japanese yen are traded alongside some less interesting currencies. The trade is possible from Sunday from 22.00 am to Friday 20.00 pm continuously.


Special features of FX market (Forex)
One of the special features is the liquidity of the market in the first place. Due to the huge volume of trade that is being moved, there is almost always a buyer or seller for a currency. This special feature gives the forex a huge advantage over the stock or real estate market. The market offers the trader a high degree of transparency. At any time, the courses can be tracked in real time via internet platforms. The investor can continuously monitor trades in the development and thus react precisely. At all risk, the Forex offers some security. The currencies are always tradable and price developments are determined by comprehensible events which are accessible to the trader at all times.


Trading practices on Forex
An advantage for the trader is that the trade can already be started with low capital use. This advantage is still topped, in which the broker allows a trade on credit. This means that the trader uses a lever on his deposit, he deposits a security (margin) and can generate profits from much larger Handeslvolumina. This leverage also has an impact on the risk, of course.


Market Development on Forex
The goal is to benefit from a trade in the price development. The courses can be developed in three directions. The trend can still go up, down or to the side. The nice thing about Forex for the trader is that there are trading strategies for all three directions and so profits can be realized. With the so-called scalping, even in the sideways development smallest fluctuations are usable to make money.


Market participants
Trading in the main currency pairs EUR/USD, AUD/USD, GBP/USD, USD/JPY, USD/CAD and USD/CHF are shared by several large market participants and individuals. The major participants are foreign exchange brokers/brokers, commercial banks, central banks and investment funds. The most famous banks on Forex are next to Deutsche Bank, Barclays Bank, Citi Group, JP Morgan and other big money houses. In the central banks, the European Central Bank and the US central bank in particular have a major influence on the price developments at the Forx.


The forex is quite a serious matter. Not for nothing does it have such great importance, so huge amounts of money are being moved. There is no reason not to be part of this happening. Get the necessary information. Find yourself a good partner for the beginning and don’t be afraid. The risk is of course great but for a total outage it is not as dangerous as the stock market. The round-the-clock access to the market and its high transparency ensure this. While he is as uncertain as many people claim, the big bank houses would certainly not do their business on forex.