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What is Forex?

What Is Forex?

Forex, is known as foreign exchange, FX or currency trading and exchanging, is a decentralized global market where all the world’s currencies are being trading. Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business. The Forex market is the biggest, most liquid market in the world with an average  trading volume exceeding U.S. $2,000 billion per day. All the world’s combined stock markets don’t even come close to this. But what does that mean to you? Take a closer look at Forex trading and you may find some exciting trading opportunities unavailable with other investments

forex

The need to exchange currencies is the main reason why the Forex market is the largest, biggest, most liquid financial market in the wide world. It dwarfs other markets in size, even the stock market, with an average traded value of around $4 trillion daily. (The total volume changes all the time, but as of August 2012, the Bank for International Settlements (BIS) reported that the Forex market traded in excess of U.S. $4.9 trillion per day.)

One unique aspect of this international market is that there is no central marketplace for foreign exchange. Rather, currency trading is conducted electronically over-the-counter (OTC), which means that all transactions occur via computer networks between traders around the world, rather than on one centralized exchange. The market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney – across almost every time zone. This means that when the trading day in the U.S. ends, the Forex market begins anew in Tokyo and Hong Kong. As such, the Forex market can be extremely active any time of the day, with price quotes changing constantly

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