Learn the basics of the forex market – mainly information

Learn the basics of the forex market – mainly information

Forex is the world’s largest currency market. It is used for currency exchange by corporations, governments and central banks, twenty-four hours a day, from 8.00AM on Monday GMT+10 to 5.00PM on Friday GMT-5. Forex is the fastest and fully automated way to perform operations on currencies. It works without human intervention, and the typical time for matching offers to buy and sell is only 50 milliseconds.

Private entrepreneurs use the forex market to invest on a leveraged basis, but this is a side function of the market. The daily trading of currencies in forex is US$5-6 trillion, making forex the largest existing market in history.

Forex history

The history of forex is strongly linked to the history of the currency itself. In the past value of money was based on gold, which meant that the amount of cash circulating on the market depended on the government’s gold reserves. This changed after the Great Depression when such a solution proved insufficient. The conditions were then established, which laid the foundations for a modern monetary system while making the currency independent of gold. In 1971, the US President suspended the possibility of exchanging the US dollar for gold, and since then, the value of the currency has been regulated by supply and demand law.

Forex is the natural consequence of this, a place where the government and central banks could exchange currencies. It was restricted to private investors, allowing the flow of money to be controlled and monitored. With technological progress, it has also become increasingly automated and has finally become accessible to private users.

Who plays on forex?

Forex is, above all, a tool to control money flow, with the majority of its users being central banks, giant companies and national governments with vast sums of money. The purpose of state authorities is to exchange and stabilise individual currencies.

However, the forex market is currently available to the private entrepreneur who will use an intermediary broker. In this sense, anyone can play forex, because the entry threshold is very low (a few dozen dollars are enough to operate the currency on forex with leverage).

Who invests in forex?

Above all, companies and small businesses. Forex is considered to be quite challenging to play, yet it still attracts crowds of interested parties and hundreds of forex trading guides can be found either online or stationary. Many people associate forex with the possibility of acquiring a substantial asset.

Day trading is the basic, although not the only, strategy for investing in forex. It consists of opening and closing positions on the same day, to obtain income from the change of course within a few hours.

There is no consensus on whether day trading in forex is a good strategy. This method has many supporters and as many opponents, and the basic principle in dealing with day trading is to use a broker with a commission low enough to make such a short-term strategy profitable.

Why trade on forex

Indeed forex is a good position for someone who is not afraid of the risks involved in investing in the foreign exchange markets and is confident of his or her skills as an investor. This is a difficult market for private entrepreneurs, but the record-holders receive revenue of 200%. Forex can therefore be an excellent method of investment, but only for people who know the foreign exchange market well, know how it works and have a good investment strategy. In that case, very thrilling profits may be obtained. It should be remembered, however, that forex tends to heavily punish those investors who do not understand its rules and count on quick, reliable cash without risk.

Dla kogo więc jest forex? Above all, for those who either already has considerable trading experience or are willing to acquire it before they sit down to day trading or another forex strategy.

Leave a Reply

Your email address will not be published. Required fields are marked *