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What is Forex

 ·  Why Forex?
 ·  How to earn money with Forex
 ·  Forex history
 ·  Forex volumes
 ·  World Currencies
 ·  Forex Market Participants
 ·  Central banks
 ·  Macroeconomic indicators
 ·  Glossary

Forex (Foreign exchange market) is an international money-market where free purchase and sale of national currencies are conducted. Forex as we know it today was formed in 1970s after the world's leading countries switched from fixed to floating rates.

The average of Forex day trading sales is $ 4 trillion, with constantly increasing volumes of funds for Forex conversion operations .

Forex's main currency is the US dollar (USD).

Market participants:

  • Central banks
  • Commercial banks
  • Investment banks
  • Brokers and dealers
  • Pension funds
  • Insurance companies
  • Transnational corporations
  • Private investors

Forex is not a stock exchange market and has no opening and closing times. It works 24 hours a day five days a week making purchase and sale operations possible for banks all over the world at any time of the day or night (some banks work on Saturday and Sunday). As at any stock exchange market, a trade on Forex occurs according to the demand and the proposal of a certain instrument. For example, there are buyers "Euro against the Dollar", and there are sellers. Exchange rates on the Forex market are constantly changing, these changes occur virtually every second, the market is extremely liquid.

Exchange rates are influenced by:

  • changing interest rates;
  • policy of central banks;
  • economic indicators of countries at the current moment;
  • political events;
  • overall mood of market participants, their expectations.

In spite of all these influences, the international exchange market Forex is very stable in comparison to stock exchanges and funds markets. It is not liable to devastating disruptions because decrease of the exchange rate of one currency means growth of another.

The main advantage of Forex is its close interplay with the IT-sphere. Players from both hemispheres can make deals via the Internet, which makes Forex available to a huge amount of people. Even major banks use e-trade, which occupies the larges share among all variants for conducting trading operations.

These days, due to the growing impact of technological development Forex is achieving even greater scale.