What Is Forex? What Are Its Unique Characteristics?

The Forex (Foreign exchange, FX, Currency) market refers to the market where currencies are traded typically via broker. It is an OTC (Over the Counter) market without any physical existence. It is the largest and most liquid market in the world. It is a decentralize market that means it has no central location. People from all over the world can involve it in.

It is a non stop cash market and operates through a global network includes banks, central banks, currency speculators, corporation, government and other financial institution.

Transaction is basically involve a party purchases a quantity of one currency by paying a quantity of another currency. The currencies are bought and sold simultaneously across local and global market everyday. The prices of foreign exchange depend on aggregate demand, aggregate supply, inflation and international events etc. The situation of foreign exchange rate can change within a moment.

Usefulness:

  • It helps enable trade and transaction between two countries.
  • It is a great opportunity to invest for risk seeking investors.

Unique characteristics:

  • The volume of trading is so high, around 1.9 trillion dollar daily.
  • 24 hour trading except weekends via internet.
  • Volatile market with huge income opportunities.
  • You can make profit from both rising and falling market.
  • Great opportunity of leveraged trading.
  • Global trading with geographical dispersion E.T.C

 

 

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