Forex Tutorial: Introduction to Currency Trading
Forex Tutorial: What is Forex Trading?
Forex Tutorial: Reading Forex Citation and Understanding Jargon
Forex Tutorial: Risks and Benefits of Foreign Exchange
Forex Tutorial: The History of Forex and Market Participants
Forex Tutorial: Economic Theory, Models, Feeds & Data
Forex Tutorial: Fundamental Analysis & Fundamentals Trading Strategies
Forex Tutorial: Technical Analysis & TechnicaI Indicators
Forex Tutorial: How to Produce & Open Forex Account
Forex Tutorial: Trading Currency Summary
What is Forex?
The foreign exchange market is the "place" where the currency is traded. The currency is important for most people around the world, whether they realize it or not, because currencies need to be exchanged in order to trade and overseas business. If you live in WE and want to buy cheese from France, either you or the company you buy from cheese have to pay France for cheese in euro (EUR). This means that the importer must exchange the equivalent value of the US dollar (USD) to euro. The same goes for traveling. French tourists in indonesiaMesirt can not pay euro to see pyramid because not local currency received. Thus, tourists should exchange the euro for local currency, in this case the Egyptian pound, at the current rate.
The need to exchange currency is the main reason why the forex market is the largest and most liquid financial market in the world. This shrinks the size of other markets, even the stock market, with an average exchange rate of about US $ 2,000 billion per day. (Total volume changes over time, but as of August 2012, the Bank for International Settlements (BIS) reports that the forex market is trading more than US $ 4.9 trillion per day.)
One of the unique aspects of this international market is that there is no central market for foreign exchange. In contrast, currency trading is done over-the-counter (OTC) electronics, which means that all transactions occur through computer networks between merchants around the world, rather than on a centralized exchange. The market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in major financial centers in London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney - almost every time zone This means that when the trading day in the US ends, the forex market starts again Tokyo and Hongkong. Thus, the forex market can be very active at any time of the day, with offer prices constantly changing.
Spot Market and Future Markets and Futures
There are actually three ways that institutions, companies and individuals trade forex: spot market, forward market and futures market. Spot trading in the spot market has always been the biggest market as it is the underlying "underlying" asset on which futures and futures markets are based. In the past, futures markets were the most popular place for traders as they were available to individual investors for longer periods of time. However, with the advent of electronic commerce, the spot market has witnessed a massive surge of activity and now surpasses the futures market as a preferred trading market for individual investors and speculators. When people refer to the forex market, they usually refer to the spot market. Futures markets and futures tend to be more popular with companies that need to hedge against their foreign exchange risk up to a certain date in the future.
What is a spot market?
More specifically, the spot market is where the currency is bought and sold at current prices. The price, determined by supply and demand, is a reflection of many things, including current interest rates, economic performance, sentiment towards the ongoing political situation (both local and international), as well as the perception of future performance of a single currency against the eye other money. . When the deal is completed, this is known as "deal spot". This is a bilateral transaction whereby one party delivers the agreed amount of money to the other party and receives a number of other currencies at the agreed exchange rate. After a position is closed, the settlement is cash. Although the spot market is known as a transaction that deals with current transactions (not future), this trade actually takes two days to complete.
What are the futures markets and futures?
Unlike the spot market, forward and futures markets do not trade the real currency. Instead, they handle contracts that represent specific currency type claims, unit-specific prices and future settlement dates.
In the forward market, contracts are bought and sold by the OTC between the two parties, which determines the terms of the agreement between themselves.
In futures markets, futures contracts are purchased and sold on the market
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