Forex market and Foreign Exchange

Forex market and Foreign Exchange

Forex market (short for Foreign Exchange ) The birth of the international foreign exchange market is often associated with the abandonment of a system of fixed exchange rates and the transition to a floating exchange rate regime. What are its consequences? The decision generated speculation with the currency. Then the state that takes place is now on the foreign exchange market.

About the reasons. The inability of the US to maintain the current dollar’s convertibility of gold.

What are the features of the functioning of this market. Let’s try to isolate the main of them, those that can be called essential, and without them we cannot imagine it already.

First, this market can be called speculative. The operations performed on it represent a significant risk of loss. Quotations change constantly under the force of the action of the number and volume of transactions. The parties themselves choose the price at which contracts are concluded.

Of course, in time and on the basis of events in economic and political life, it is they who become the “abundant food of speculators”, Moving the market in one direction or another.

Another important point. Since trades are made not in one particular country, but within the framework of relations complicated by a foreign element, traders start to trade, despite the round-the-clock nature of this trade, at certain times of the day. Those if we consider trades within one day, then we can talk about the existence of three main zones, geographical centers of currency trading (according to the existing time zones). This is Asia centered in Tokyo, Europe centered in London and German Frankfurt – on the Main, as well as the United States of America with centers in three cities – New York, Chicago and San Francisco. Of course, the available statistics do not allow talking about trading as a sustainable source of income for a large part of the population. The trading deposit of a significant mass of Forex traders does not exceed one hundred US dollars. Someone remains at a loss. But still you need to understand and realize the significant advantages of trading in the Forex market before the truly gaming mechanisms with absolutely unpredictable outcomes – casinos, other numerous gambling games. Forex is not a game, although the element of chance and the market can not be ruled out. Knowledge and experience as in any Case, only they can reduce the risk to a minimum and lead to Success. As in any professional activity. only they can reduce the risk to a minimum and lead to success. As in any professional activity. only they can reduce the risk to a minimum and lead to success. As in any professional activity.

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