Forex market- is an international foreign exchange market. It gets its name from English shortening FOReign Exchange- foreign exchange operations. Forex market is one of the youngest financial markets (Forex has existed since the 70th of the last century). However, it is the largest in volume and fastest-growing market. The daily trading turnover at Forex constitutes to 4 trillions dollars, which in 30 times exceeds the combined volume of all stock markets in the USA.
Like any other market, Forex trades certain goods. In case of foreign exchange market these goods are national currencies of different countries.
The key factor of currency rate movement is the need of state bodies as well as commercial companies to convert profits from the sale of goods and services abroad into its national currency. It accounts for 5% of the foreign exchange market turnover. The remaining 95% provides currency traders speculative capital aiming at extracting profit from currencies rate movement.
Distinctive feature of the foreign exchange market is its stability. It is a well-known fact that the main threat for any financial market is its meltdown, the fall of the stock index. However, unlike other markets (stock and commodity markets) Forex is defended owing to the specific of its commodity - currency. If shares devalue it is a financial collapse. If the dollar falls, this means that another currency has become stronger, market movement becomes more active. This is a good chance to generate additional profit for a trader. Unique stability of the Forex market lies in this Forex peculiarity: currency is one of the most liquid and reliable trading instrument among all existing.
The greatest interest for speculators is the most common (most liquid) currencies that are "basic". At the moment more than 85% of all deals constitute to deals with basic currencies, which include: US dollar (USD), Japanese yen (JPY), Euro (EUR), British pound (GBP), Swiss franc (CHF), Canadian dollar (CAD) and the Australian dollar (AUD).
Forex is available everywhere. Due to the Internet, you may conclude deals with the clients who are in the other part of the world. As it was mentioned above, exchange market always gives you an opportunity to make profit, i.e. rates fluctuations of this or that size take place several times a day. Fluctuations of the currency rates, your intellectual potential, and new technologies allow to build high profitable business right now.
One more indisputable plus of the Forex market - is easiness of market entrance. It is not difficult to find a reliable Broker - there is a great supply at this market. The rest depends only on the person who decides to enter Forex.
Source: instaforex.com
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