Forex is the global market for the free exchange of international currencies. Forex Traders trade one currency with another currency. Forex finance is the group of economic activities to manage the investment they have done in the foreign exchange market. A simple example of a Forex transaction is a dealer who may buy Euros with US dollars, Yuan with British Pound, etc. The foreign exchange or currency market is the world’s largest financial market. Over $4 trillion dollars worth of currency is exchanged every day. This huge market is among the most rapidly evolving markets with the advent of floating rates. Foreign currencies can be traded freely and the value fluctuated based on market forces opening the market to each member of the world economy.
Earlier the Forex market has been made open only to banks and other major financial institutions. With advancement in technology over time, however, the Forex market is now open to everyone, from banking institutions to wealth managers to individual Forex traders. Today Government central banks, Commercial banks and Investment banks, Brokers and dealers, Insurance companies, multinational corporations, Pension funds, and Individuals from all countries can take part in this, making it a truly dispersed financial market, also called macro forex.
With the summer officially over, traders are returning to a challenging environment. Equity indices are within striking distance of 52-week highs, having spent the summer grinding higher on incredibly light volume. At the same time, the global economy is teetering on the brink of recession, with a number of serious macro risks lurking. The political spectrum creates just as much uncertainty as the economic picture (can one really separate the two?) as politicians around the globe struggle to come up with …
People have known to approach the forex market with different interests and motivations. Some approach to hedge their risks while some traders need foreign currency to be paid for product and services. The largest section is made of traders that come to make profits with trades. This may be with short term or long term goals. In macro forex, investments are carried out in the forex market on a global scale for long term profits involving huge capital. The volume is incredibly huge and keeps increasing. More than $4 trillion is traded every day which is greater than 10 times the amount of other global exchanges combined, making it the most unique phenomenon which the business world has ever seen.
Unlike stock exchanges with limited working hours, the forex market is open 24*7, five days a week. As it is global market, traders from all parts of the globe in different time zones need to purchase and sell currency, so the forex market is accommodating and open for all of them to do this.
The finance of forex is likewise driven by simple rule of supply and demand, as with any market. This demand and supply isn’t of the goods or services but of currencies. It follows the basic thumb rule that if buyers of a particular currency exceed sellers, prices go and if sellers exceed buyers of a particular, the value goes down. Even with all the multiple factors that influence the Forex, the global Forex market is more stable than stock markets. Exchange rates generally fluctuate slowly and by small amounts, and more manageable than stock exchange rates, making a great place if you’re a financial player. Join the global scene with forex finance and experience this global phenomenon first hand.