WHAT IS FOREX?

Currencies are important to most people around the world, whether they realize it or not because currencies need to be exchanged to conduct foreign trade and business. The need to exchange currencies is the primary reason why the forex market is the largest, most liquid financial market in the world. It dwarfs other markets in size, even the stock market. Differentiating from other financial products FX market is an OTC ( Over the Counter) market which does not have a centralized system.

Because of the different regions in the world, FX markets are always awake. You can track your position and execute it at the midnight. Tokyo, Sydney, London, Frankfurt, and New York are the primary bases for the OTC FX market. With the help of leverage, small investors can deal big amounts in the market.

THE PRODUCTS THAT CAN BE A TRADED VIA FOREX AND LEVERAGE

Currency pairs, commodities, Indices are all leveraged under the CFD umbrella ( Contract for differences):. You can leverage more than 100 the products provided to you by Mekness. The contract price is streaming and updated in milliseconds. EUR/USD parity has the most volume in the Forex world. Followed by G7 currencies and precious metals.

THE VOLUME OF

FOREX MARKET

It reaches 5.5 trillion in US dollars volume that is traded in a daily routine which was 1.9 trillion dollars in 1998. Biggest and the fastest growing financial market in the world.

The executions are made electronically by various brokers and banks across the globe mostly in the USA and Germany. %70 of the transactions are denominated by USD.

Central Banks

Central banks have the main purpose in money markets to stabilize or speculate by using their money market tools in their currencies. They are empowered to stabilize the dependant currency by controlling the supply and open monetary actions on the markets.

Central Banks play the main role in FX markets because of the actions they are empowered to do to control or speculate their currencies. Their actions can be piled up in expansionary and contractionary monetary policies. By increasing the supply and lowering the interest rates they can boost up the lending and investing capabilities of the markets to heat up the economy or by decreasing the supply and increasing the rates can result in a valuable currency that can ease economical activity and led to carry trade.

Easing and tightening eventually refers to inflation and deflation. Central Banks in many ways try to control and shape economical activities and currency values with the help of monetary tools.

Banks and Market Makers

Market Makers are the flow producers that the contributors can buy and sell from them or for them. Quotations are standardized internationally and money market participants (Banks other market makers) are dealing with each other to balance the system like combined vessels.

Importing and Exporting entities.

Entities that have export and import values have to deal with more than one currency because they are not operating in one country. They are not producing and selling the items within the same currency so there always be a risk in the treasury side apart from the profits of operations. The use of FX markets to hedge and manage their currency risks to fix their operational incomes and stabilize their businesses.

Investment Funds

Funds that are speculating the market and trying to create profits from the differences in the markets of currencies are also participants of the market itself. They are trying to calculate the future prices of currencies and open positions on behalf of their clients to make profits.

Individual investors.

Individual investors also have the right to trade in FOrex markets with the help of professional financial institutions and brokers. They can make profits like funds by trading on the spot prices of the currencies. The individual side also has the advantage of leveraging their positions with the help of the prime brokers that they are using to lend them.