The foreign exchange market (forex, FX, or currency forex market) is really a worldwide, decentralised, over the counter financial marketplace for trading currencies. It is the largest financial market worldwide using a level of over $1.5 trillion every day worldwide*. Total volume analysis volume is more than 3 times the complete of the stocks and futures markets combined.
With Pepperstone, you will get direct accessibility forex ‘spot’ market – a market that deals in the present cost of a financial instrument.
Traditionally, retail investors’ only methods of accessing the foreign exchange market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has risen rapidly over time, especially after exchange rates were capable to float freely in 1971. Today, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long-term holders and hedge funds all use the FOREX market to purchase services and goods, transact in financial assets or even to reduce the danger of currency movements by hedging their exposure in other markets.
There is no central marketplace for currency exchange; trade is conducted over-the-counter. The foreign exchange market is open twenty-four hours a day, five days every week and currencies are traded worldwide one of the major financial centers of London, The Big Apple, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.
Within the forex trading market there is little or no ‘inside information’. Exchange rate fluctuations are usually caused by actual monetary flows and also anticipations on global macroeconomic conditions. Significant news is released publicly so, at the very least in principle, everybody in the world receives the identical news concurrently.
Large corporations trade about the FX market to regulate revenues and expenses incurred in various currencies through hedging whereby a trade or multiple trades are opened as a way to try to minimize around the losses in other trades.
Investors trade currencies to make money. Most forex currency trading is speculative by analyzing market and political news (fundamental analysis) and/or studying the chart background of an instrument (technical analysis). Unlike other asset markets, in forex it is possible to make money from a currency losing value since it is from the currency rising in value.