WHAT IS FOREX?

WHAT IS FOREX ??

Rajabroker

What is forex?
Foreign Exchange (Forex)is a type of trade or transaction that trades a country's currency against another country's currency (the currency pair) involving the markets of major currencies in the world for 24 hours continuously.

The movement of the forex market began from New Zealand and Australia market, continued into the Asian markets of Japan, Singapore, and Hong Kong, to the European market such as Germany and the UK, to the US market. Meanwhile, Forex market is a non-stop cash market where currencies are traded usually through a broker. Foreign currencies are constantly and simultaneously bought and sold in the local and global market then experienced 'increase or decrease in value based upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events.

The Forex market is a large and liquid market that operates 24 hours a day non-stop. This is not like traditional market because there is no central trading location. Most of the trading is done through electronic trading networks. The foreign exchange market allows companies, banks and other financial institutions to buy and sell foreign currency in large amounts.

The main trading centers in London, New York, Tokyo and Singapore, but banks around the world has also become participants. Forex trading occurs throughout the day. If the Forex market Forex Asia ended the European market was opened and when the Forex market Europe ending the US Forex market starts and return again to the Forex market Asia, except on weekends.

Currency traded with each pair in Forex such as EUR/USD, USD/JPY, GBP/USD and others. Factor in one currency such as the USD will affect the value of the Forex market in USD/JPY and GBP/USD, this is a correlation between USD/JPY and GBP/USD. In FX, people can buy or sell currencies. The main goal is to gain profit or advantage from the position transactions.

The Forex market is the largest financial market in the world with a turnover in excess of 3 trillion USD per day. And in order to make trading or Forex transaction at this, it can be through a media Broker or Broker Company which serves to bridge this trade process. But there are also some brokers that do not bridge this transaction to real currency market, but uses a market or markets made itself (Market Maker). Therefore, it is important to know the types of brokers that are not wrong in choosing which could result in losses or scam. A good broker company also plays an important role in determining the direction IMPORTANT your success in trading Forex. The primary market for the currency market is "inter-bank" where banks, large companies and large financial institutions manage the risks associated with fluctuations in currency exchange rates.

Major Currencies
Dolar AS (USD)
Yen Jepang (JPY)
Euro (EUR)
Canadian Dollar (CAD)
Dolar Australia (AUD)
Swiss Franc (CHF)
British Pound (GBP)

MARKET PLAYERS
In general, forex Market performers come from various groups such as:

Customers, such as multinational corporations, to participate in the forex market because they need foreign currency for their trade in other countries. For example, a company based in the UK need to use the foreign exchange market to buy the currency they need to pay their partner companies in other countries that sell heavy equipment.

Banks and Financial institutions, is the most active participants in the forex market. They deal with other financial institutions to ask for foreign exchange rate and they can buy the currency they need in the forex market. In addition to the central bank and the government, one of the biggest players in the forex transactions are banks. Interbank market is a market where large bank2 transact among themselves and determine the price of the currency to be like that shown by individual traders as we are on the computer screen.

Bank, in general act as dealers that offer currencies to traders. One way these banks make money is to sell the currency at a higher price than he bought to its customers. Because the forex market is not centralized alias decentralized, then the natural thing viewed from bank to another bank has a slight difference in the exchange rate.

Broker, is a company with software that connected to the banks around the world. It is the job of forex broker to find out what bank has the highest rate to buy the currency and what the bank has the lowest rate for selling the currency. By using a broker allows the bank to find the best deal available in the world. Forex brokerage firms, but this is not related to money itself but only charge a commission for their services.

Goverment, is the most influential player, in addition to the central bank. In many countries, the central bank is an arm of the government and carry out its policies together with the government. However, some governments feel more independent. A central bank is more effective in carrying out its duties to boost the economy. Regardless of how indipendennya a central bank, government representatives usually regularly consult with representatives of central banks to discuss monetary policy. So, governments and central banks usually have a package in terms of monetary policy. The central bank is often intervene in the market for the purposes of a particular country's economy.

Business Industry, is one of the biggest clients of these banks, those involved in international transactions. Both businesses are selling goods to an international client or buying goods from international suppliers, they have to deal with the volatility of currency fluctuations. Uncertainty becomes thing hated by the management as well as business owners. Faced with foreign exchange risk is a big problem for multinational companies. For example: a company in Germany ordered equipment from factories in Japan to be paid in Yen 1 year from now. Because of the exchange rate can fluctuate wildly dg throughout the year, the German company will not know whether the future will issue a euro more or not at the time of delivery later. One way for businesses to reduce uncertainty for foreign exchange risk is to go to the spot market and transact directly to the foreign currency they need. But, unfortunately, businesses may not have enough cash on hand to make spot transactions or do not want to hold the amount of foreign currency which is very much for a long time. Therefore businesses often implement a hedging strategy to lock specific currency at a certain price for the purposes position in the future.

Speculators, they are trying to earn money by taking advantage of price fluctuations. One of the most famous speculator is George Soros.

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