The FOREX market is named currency exchange. If you exchange dollars for EU dollars at you bank, your bank bundles your exchange with other transactions and trades them on the forex market. The idea is to get the maximum favorable rate of exchange. In this fashion your bank wants to earn a profit on your transaction. Forex exists to facilitate world investments and trade. If you went to Europe with dollars, you couldn't spend them. World companies have an identical issue, so foreign exchange exchanges the currency.
The currency market has no physical location and is open for business twenty-four hours per day between Mon. morning in New Zealand thru Friday night in the East. The average trading volume is over 3 trillion dollars a day. Profit markups are relatively low.
The market trades, typically over 3 trillion dollars a day. Margins are tiny, but that isn't an argument when trading in amounts this big.
By contrast, about 80% of the trading is done by the 10 most active traders, which are huge international banks. These traders make up the top tier of the market. The difference between the bid and ask prices at these levels are extremely narrow and not available to the rest of the traders. These top tier traders account for 53% of total trading volume. Below the top tier are smaller investment banks, large multi-national firms and massive hedge funds.
The ten most active traders do about eighty percent of the trades. These are large global banks and they make up the top tier of the market. The profit margins at this level are minute and the bid and ask prices are not available to traders outside the top tier. About 53% of the trading volume is done in the top tier. The following tier includes giant world corporations, investment banks and large hedge funds.
Plenty of the transactions, about seventy percent, are of a hopeful nature. That is, they are done in the hopes of earning a return rather than an exchange for practical use. Average financiers can only gain access to this market thru a foreign exchange foreign exchange broker. Until recently, their were few restrictions on the practices of the brokers. There is an ongoing effort to crack down and eliminate brokers who take trades that are in clash with the best interests of their clients.
Currency exchange is a speculative market. While it may be less dangerous than high risk stock trading, as with any investment there is a potential for both gain and loss. When shake ups in the market occur, most traders head for the safest, or most stable currencies, like the Swiss franc. This drives the rate of exchange up on those currencies.
The derivatives available to backers are similar to those offered by the commodities market, although maybe with less risk, particularly if you stick with major currencies like the yen, the GPB, the euro and the US greenback. The futures contract is mostly held for three months, although spot contracts which are usually for a couple of days are also available. The forward contract is less risky because no cash is exchanged till a future date concluded upon by the parties. You may also get swap contracts where you exchange currencies for a mentioned length of time. The safest is the option contract that gives you the legal right to exchange currency at a fixed on date, but puts you under no need to make the exchange.
The currency exchange market is growing fast and offers good investment potential for traders that know the market. Find a reputable broker by speaking to other stockholders in this market. Learn all you can and stay current on the market trends. If you trade smartly you can make a respectable profit. It also has the benefit of allowing you to liquidate your assets when you need them. Foreign exchange is one of the better investment strategies available to small investors. - 31876
The currency market has no physical location and is open for business twenty-four hours per day between Mon. morning in New Zealand thru Friday night in the East. The average trading volume is over 3 trillion dollars a day. Profit markups are relatively low.
The market trades, typically over 3 trillion dollars a day. Margins are tiny, but that isn't an argument when trading in amounts this big.
By contrast, about 80% of the trading is done by the 10 most active traders, which are huge international banks. These traders make up the top tier of the market. The difference between the bid and ask prices at these levels are extremely narrow and not available to the rest of the traders. These top tier traders account for 53% of total trading volume. Below the top tier are smaller investment banks, large multi-national firms and massive hedge funds.
The ten most active traders do about eighty percent of the trades. These are large global banks and they make up the top tier of the market. The profit margins at this level are minute and the bid and ask prices are not available to traders outside the top tier. About 53% of the trading volume is done in the top tier. The following tier includes giant world corporations, investment banks and large hedge funds.
Plenty of the transactions, about seventy percent, are of a hopeful nature. That is, they are done in the hopes of earning a return rather than an exchange for practical use. Average financiers can only gain access to this market thru a foreign exchange foreign exchange broker. Until recently, their were few restrictions on the practices of the brokers. There is an ongoing effort to crack down and eliminate brokers who take trades that are in clash with the best interests of their clients.
Currency exchange is a speculative market. While it may be less dangerous than high risk stock trading, as with any investment there is a potential for both gain and loss. When shake ups in the market occur, most traders head for the safest, or most stable currencies, like the Swiss franc. This drives the rate of exchange up on those currencies.
The derivatives available to backers are similar to those offered by the commodities market, although maybe with less risk, particularly if you stick with major currencies like the yen, the GPB, the euro and the US greenback. The futures contract is mostly held for three months, although spot contracts which are usually for a couple of days are also available. The forward contract is less risky because no cash is exchanged till a future date concluded upon by the parties. You may also get swap contracts where you exchange currencies for a mentioned length of time. The safest is the option contract that gives you the legal right to exchange currency at a fixed on date, but puts you under no need to make the exchange.
The currency exchange market is growing fast and offers good investment potential for traders that know the market. Find a reputable broker by speaking to other stockholders in this market. Learn all you can and stay current on the market trends. If you trade smartly you can make a respectable profit. It also has the benefit of allowing you to liquidate your assets when you need them. Foreign exchange is one of the better investment strategies available to small investors. - 31876
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