The international currency inter-bank Forex market has been based in 1971. The major principle of a currency exchange on Forex consists in an exchange of one currency for other. Even if to compare a turnover of the American securities exchange (300 billion dollars a day) and a turnover of the joint-stock market (10 billion dollars a day) the volume of currencies with which operates Forex, will seem the enormous. Today the turnover in the Forex market constitutes from 1 to 1,5 billion dollars a day.
The core in currency trade is that the dollar competes with four principal currencies: the British pound sterling, the Japanese yen, Swiss franc and Euro. In currency market activity, first of all, are involved state and banks of commerce, corporations, brokers and other financial organizations. The greatest activity is observed from outside brokers.
Forex – the unusual market. It does not have united center. Today trade in this market is led by means of telephone service and through terminals of a computer network. What is the Forex currency market in comparison with operations on a currency exchange?
For the potential investor is very important to understand good a difference between Forex currency market and operations on a currency exchange. At operations on a currency exchange the amount of contract is always defined in advance. Exchange traders use performance bond or margin for the control of the exchange contract (”margin” are the money deposited by the buyer or the seller at a conclusion of a contract). But, if to speak about liquidity in the market, the currency exchange looks rather limited because the information stream ceases with closing of an exchange in the end of day (the same as and at a joint-stock exchange), infringing thereby upon a continuity of the analysis and communication with the market. For many traders it is an occasion to anxiety. If, for example, the important data arrives from England or Japan, when the American currency market is closed, next day the trader will not have enough information to start the trade successfully.
Contrary to a currency exchange trade in the Forex market is led 24 hours a day and never ceases. In all time zones, in any of the basic world shopping centers (London, New York, Tokyo, Gong-Kong, Sydney, etc.) are present the dealers ready to grant to you possibility to enter into the market in both sides immediately. As it was already marked, the turnover of this market constitutes from 1 to 1,5 billion dollars a day and ensures that almost unlimited liquidity. Because of a huge daily turnover and constant buying power, the Forex currency market on dynamism and passion cannot be compared to any other market in the world.
What moves the market?
Among the major factors influencing exchange rates of currencies, it is possible to notice the following: equation of mutual payments, economic situation, the forecasts made on the basis of schedules of technical analysis, and also political and psychological factors.
Before you make up your mind to make a forex investment or start forex trading yourself, better find a nice forex book and read more about forex market – this will save you from lots of troubles and traps.