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Introduction to Foreign Exchange Markets - FOREX

Discussion in 'Forex Beginner Q&A' started by prav, Dec 2, 2008.

  1. prav

    prav Moderator
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    The purpose of this overview is to introduce the forex market to you. As with many markets there are many derivative of the central market such as futures, options and forwards. In these tutorials we will be discussing the main market sometimes referred to as the Spot or Cash market.

    The word "FOREX" is derived from the words Foreign Exchange and is the largest financial market in the world. Unlike many markets the FX market is open 24 hours per day and has an estimated $1.2 Trillion in turnover every day. This tremendous turnover is more than the combined turnover of the main worlds' stock markets on any given day. This tends to lead to a very liquid market and thus a desirable market to trade.

    Unlike many other securities (any financial instrument that can be traded) the FX market does not have a fixed exchange. It is primarily traded through banks, brokers, dealers, financial institutions and private individuals. Trades are executed through phone and increasingly through the Internet. It is only in the last few years that the smaller investor has been able to gain access to this market. Previously the large amounts of deposits required precluded the smaller investors. With the advent of the Internet and growing competition it is now easily within the reach of most investors.

    Although the foreign exchange market is the largest traded market in the world, its reach to the retail sector pales in comparison to the Equity and Fixed Income markets. This is in large part due to a general lack of awareness of FX in the investor community, along with as a lack of understanding of how and why currencies move. Adding to the mystique of this market is the lack of a physical central exchange akin to the NYSE or the CME. It is this very lack of structure that enables the FX markets to operate on a 24-hour basis, beginning the trading day in New Zealand and continuing through the time zones.

    For active traders and investors, foreign exchange should be no different than other investment products such as equities, commodities or fixed-income. Because of globalization in the economic world and consolidation of whole economic regions (i.e., the European Union), including currencies in a portfolio helps to diversify assets and can reduce risk.

    Just like other investment alternatives, foreign exchange offers traders/investors a market where they can buy or sell an investment product. In this case it is a specific Currency Pair. The currency pair may be the Euro versus the US Dollar, the US Dollar versus the Japanese Yen, the British Pound versus the US Dollar, the Euro versus British Pound, or a number of other currency combinations. The different currency combinations represent nothing more than the value of one currency versus the value of another. That relationship is represented by a single price. In foreign exchange, the price of a currency pair is the market’s expectations (at that time) of the value of that currency measured against another currency given the current and expected economic and political situation in the two economies. In equity terms, it is the price of the stock.
     
  2. dhiraaz

    dhiraaz New Member

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    Hi,

    Thank you for Introduction to Foreign Exchange Markets - FOREX.
     
    #2 dhiraaz, Apr 6, 2009
    Last edited by a moderator: Apr 6, 2009
  3. Sayen Aylen

    Sayen Aylen New Member

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    Hi,
    I am a newbie in Forex trading, and I found your article a very informative one. Thank you so much.
     
  4. herry_fxhope

    herry_fxhope New Member

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    Thank you about your information
     
  5. mickbali123

    mickbali123 New Member

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    Thanks for telling about foreign exchange markets...
     
  6. globalnomad

    globalnomad New Member

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    Well the quote was nicely written as gives the complete knowledge for doing Forex trading.Well i just want to add some more points in the above topic by throwing some light on the software that we can use for doing Foreign trading.
    On Metatrader Fx trading can easily be done with the help of Forex Excel functions.
    which is helpful in doing trading & stock stimulator related function with better fexibility & user friendly approach.
    As i am alsp using this feature and you can also avail this,visit at http://www.fxdialogue.com/,
    as mine experience is good
     
  7. fxcoaching

    fxcoaching New Member

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    #7 fxcoaching, Oct 24, 2010
    Last edited: Oct 24, 2010
  8. Jacq Stone

    Jacq Stone New Member

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    It was such an informative one. This kind of information will give the newbies an overview about Forex. In order to succeed in the market, you must be equipped with proper knowledge and tools that will help you achieving your goals.


    Please feel free to come and visit our FB page for more latest news and updates that will help you guys to improve your decision making.

    http. www. facebook. com/pages/Ikofx/213186568697555



    FOREX
     
  9. sininfinity

    sininfinity Active Member

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    Nice information given out there. Some people may think it is ok to skip the basics of forex but it is not a correct thought. When one plans to do a business then he or she should know every bit which is possible to learn about the market.
     
    prav likes this.
  10. prav

    prav Moderator
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    @sininfinity Thanks :)
     
    sininfinity likes this.
  11. Martha

    Martha New Member

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    Thanks for information Forex. I love to do forex.
     
  12. farhan khan

    farhan khan New Member

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    Very good information related to the introduction of forex market is given above in brief which will help to achieve good profit in trading if you analyze the market properly by using these given tips and Epic Research also provide all the information about the market in detail.
     
  13. vic84

    vic84 New Member

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    Yea forex market has grown a lot and due to which many people have started investing in the market, the comfort of trading at anytime and from anywhere makes more people to invest in it.
     
  14. Blossom

    Blossom New Member

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    As newbie, the article is much more informative. First article of the forum, i have read is yours. I will continue to read all the article so that i can get more and more information about the forex as beginner.
     
  15. Mubashir

    Mubashir New Member

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    Hi,
    Thanks for your informative post it is really helpful for understanding forex trading and its several aspects. I am new here in this forum and find this forum very helpful. Hope i will get great experience from here.thanks alot.
     
  16. Mistalee

    Mistalee New Member

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    Thanks for sharing such a great information, many newbies are not having the appropriate knowledge about the Forex, it would help them a lot.
     
  17. sininfinity

    sininfinity Active Member

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    Thank you for providing informative information. :)

    Forex market has evolved over the years. Bulls and bears both have been working out and lots of methods or strategies have been developed to win on their side.
     
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