The international currency market exist in the way it is today since the 70's of the previous century. The transformation from fixed quotes to changing ones makes it possible for investors and companies to make profit from trading the currency pairs. The word Forex origins from the Foreign Exchange Market and with it we define the currency market.
The daily turnover on the currency market goes up to the amount of 3.5 trillion dollars. That makes it the most liquid market in the world. As such of a market the forex market has almost at any time people that want to buy a price and people that are selling it. Sometimes, very rarely, there are no participants on the market that want to buy or sell the currency on the certain price level and the market makes a gap. Since that happens very seldom, we can account it as an exception.
The forex market works 24 hours, day and night, from Monday to Friday. Depending on what is the time the trades go through the main financial centers - London, New York, Tokyo, Sidney. The market is more active in the beginning of the London and New York Sessions and less active trough the Tokyo and Sidney sessions.
In the last decade the group of individual investors and participants in the forex market gets bigger and bigger. The reason for this is introduction to the so called marginal trading and the leverage. With those two everybody can take part in the currency trading even if he does not have a big amount of capital. Most of the cases the forex broker will give the trader a leverage for example 1:100 (1%) which means that the participant can trade on the market with hundred times bigger capital than what he has invested. For example if a trader funds his account with $500 he would be able to trade with $50 000 on the market.
After an individual registers with his forex broker he gets a trading platform that can be installed on his computer. With the help of that platform the trader can analyze the price movement. He places so-called indicators and lines that help him predict future movements on the market. Combining several indicators and techniques he gets a clear entry point to the market.
According to their trading system there are several types of participants in the market. Investors (looking for big movements that can last very long), position traders (seeking movements that can last up to a week), day traders (trading through the day, for several hours) and scalpers (trying to catch several pips on very small movements that last minutes or 1-2 hours). There are also traders that program their trading system and analysis into a trading robot. That way they do not need to be in front of the computer all the time in order to trade. Such robots have been very popular the last years and even inexperience traders can take advantage out of them.
The daily turnover on the currency market goes up to the amount of 3.5 trillion dollars. That makes it the most liquid market in the world. As such of a market the forex market has almost at any time people that want to buy a price and people that are selling it. Sometimes, very rarely, there are no participants on the market that want to buy or sell the currency on the certain price level and the market makes a gap. Since that happens very seldom, we can account it as an exception.
The forex market works 24 hours, day and night, from Monday to Friday. Depending on what is the time the trades go through the main financial centers - London, New York, Tokyo, Sidney. The market is more active in the beginning of the London and New York Sessions and less active trough the Tokyo and Sidney sessions.
In the last decade the group of individual investors and participants in the forex market gets bigger and bigger. The reason for this is introduction to the so called marginal trading and the leverage. With those two everybody can take part in the currency trading even if he does not have a big amount of capital. Most of the cases the forex broker will give the trader a leverage for example 1:100 (1%) which means that the participant can trade on the market with hundred times bigger capital than what he has invested. For example if a trader funds his account with $500 he would be able to trade with $50 000 on the market.
After an individual registers with his forex broker he gets a trading platform that can be installed on his computer. With the help of that platform the trader can analyze the price movement. He places so-called indicators and lines that help him predict future movements on the market. Combining several indicators and techniques he gets a clear entry point to the market.
According to their trading system there are several types of participants in the market. Investors (looking for big movements that can last very long), position traders (seeking movements that can last up to a week), day traders (trading through the day, for several hours) and scalpers (trying to catch several pips on very small movements that last minutes or 1-2 hours). There are also traders that program their trading system and analysis into a trading robot. That way they do not need to be in front of the computer all the time in order to trade. Such robots have been very popular the last years and even inexperience traders can take advantage out of them.
