What is Forex?
Welcome to Foreign Exchange, The most liquid financial market, dynamic and lucrative the world:
- Your daily volume of 1.5 trillion U.S. dollars makes it the most liquid market. In comparison, the estimated average trading volume for the stock market the world’s largest, the New York Stock Exchange (NYSE) for a full month, which equals the volume, daily, is traded on the forex market.
— His running 24 hours a day and night makes it the most dynamic market.
- Funding, the highest of all financial markets Makes it potentially the most lucrative market. In FOREX An investor may finance 99,000 USD per 1000 USD of margin you have deposited in your account, this deposit or margin may reach a potential daily movement between 100% and 200%.
The operation in the Forex market involves the simultaneous purchase of one currency and selling of another. Currencies are traded in pairs, for example, EURO / DOLLAR or DOLLAR / YEN. In a long position (long), an investor buys a currency at one price and aims to sell later at higher prices. In a short position (short), an investor sells a currency in anticipation that it will depreciate. In each open position, the investor is long in one currency and short in another.
Today, the 85% of all transactions in the Forex Market include Dollar USD (USD), the Japanese Yen (JPY), Euro (EUR), the Pound Sterling (GBP) Swiss Franc (CHF), the Canadian Dollar (CAD) and Australian Dollar (AUD).
Investors ignored two types of analysis: Fundamental and Technical. The first uses the basis of macroeconomic news of world events, including political, economic indicators, fiscal policies, inflation, unemployment and interest rates. The second uses graphs, trendlines and support and resistance levels (among others), to identify opportunities to generate capital gains.
The operations are conducted via phone or by investment platforms. There is a central location, unlike the bags. It is a true 24 hour market begins each day in Sydney and moves around the world, As the day begins in each financial center world: first Tokyo, then London and finally New York.
Unlike other financial markets, investors can respond to fluctuations caused by economic events, social and political at the same moment they are happening, day or night.
Forex Market potential
The FOREX market is the largest financial market in the world. When formed in 1977, the daily turnover was approximately U.S. $ 5 billion. Today, that volume has risen to the 1.5 trillion dollars a day. Every day, trillion dollars are tradedIn different currencies worldwide.
If trading volumes in all stock markets around the world, we would see that the total volume is only a fraction of what is traded on the FOREX market. Thus, while the U.S. stock markets do not reach $ 10 trillion traded daily on the FOREX market are traded each day, more than 3,500 trillion.
The explosive yields, which potentially generated in this market are attracting more and more Investors around the world. The growth that is experienced FOREX is dizzying, achieving an unparalleled level of daily transactions. And this growth shows no sign of stopping. On the contrary, for next decade growth is expected to level day trading in FOREX close to 300%Is estimated also that the daily trading volume in foreign exchange markets will increase at a rate of 25% annually in coming years.
Its excellent liquidity and its sheer volume make it an unrivaled market, no point of comparison with the liquidity and volume of other financial markets. Moreover, being open 24 hours a day, investors can buy, sell and liquidate positions at any time of day or night.
Participants in the forex market
Unlike traditional financial markets, bringing together buyers and sellers under one “roof” (so called “trading floors”), trading in the Market not performed in a centralized location, but through the Internet, investment platforms, computer terminals and telephones.
That is, FOREX Market perimeter is not negotiating and, therefore, is said to be an OTC market (English: Over the Counter Market). Geographically, the “centers” of the world’s major operations are located in London, New York, Tokyo, Singapore, Frankfurt, Geneva / Zurich, Paris and Hong Kong.
Until recently, FOREX Market was exclusively operated by large banks and financial institutions. A Individual investor him almost impossible enter this market, because of the magnitude of the capital they were required to participate. Today, an investor who wishes to return on capital as small as $ 5,000, you can quickly access this vast market. Thanks to leverage, investors operate sums of $ 100,000 with only $ 1,000 of equity.
Internet, communications technologies and leverage, has returned to the Forex market accessible to all investors. Welcome to the largest financial market and lucrative!
Forex market attractive
In recent years, investors of all categories and all countries have dramatically increased their participation in the currency markets. Why?
Then summarize the 9 reasons that make investors feel so drawn to FOREX Market:
1. The world’s most liquid market. The FOREX market can absorb trading volumes so huge that the capacity of any other financial market is negligible when compared to what exists in the currency markets. In other markets like the stock market or futures, the lower liquidity of some action or “commodity” means that investors often have to liquidate their positions at a price you want. The unparalleled liquidity of the FOREX Market is a powerful claim to any investor as it gives freedom to open or close a position at will, in three seconds, and the price on that one “clicks”. Moreover, the liquidity of the FOREX market means that Investors can withdraw their funds of your investment account more easily and quickly than in other markets.
2. Transparent market. Given the multibillion-dollar negotiation that takes place every day in currency markets is virtually impossible to market manipulation.
3. Continuous trading market. Something I find it fascinating to participants in the FOREX market is the nature of 24 hours .. Here there is a schedule of opening and closing, but investors can operate for a continuous schedule of 24 hours a day for 5 days a week.
4. Market without deadlines forced. Participants from other financial markets are constrained by having to respect a particular time horizon. In the FOREX market, however, a position can remain open as long as the investor deems necessary.
5. Market without the implementation costs. Traditionally, the FOREX market has not received commissions for services, other than a natural difference between the purchase prices and sales (the spread).
6. Market with identifiable trends. For various historical periods, currencies have shown substantial and identifiable trends. The fact that every currency will provide a historical pattern of well-defined trend, facilitates return on capital strategies.
7. Two-way market. Unlike other financial markets, the FOREX market is a double direction. That is, Investors can earn as much if it stays like low.
8. Leveraged Market. Leverage allows you to participate in the FOREX market with only one hundredth of what you invested. In other words, with a small investment can control one sum much more capital. This allows you to buy or sell one currency against another on many of your funds.
9. Operating with margin. One of the great advantages enjoyed by the investors in the market is able to operate on margin. This means that the total investment they have in the market, threatening only a small part which, if operated properly, can result in abundant earnings.