The forex market (forex, FX, or currency forex market) is actually a worldwide, decentralised, over the counter financial marketplace for trading currencies. It is the largest financial market on the planet with a volume of over $1.5 trillion per day worldwide*. Total read more volume is more than 3 x the whole in the stocks and futures markets combined.
With Pepperstone, you will possess direct accessibility forex ‘spot’ market – a market that deals in the current cost of a financial instrument.
Traditionally, retail investors’ only way of accessing the forex trading market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has grown rapidly with time, especially after exchange rates were allowed 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 products or services, transact in financial assets or even to reduce the danger of currency movements by hedging their exposure in other markets.
There is not any central marketplace for currency exchange; trade is carried out over-the-counter. The forex market is open round the clock, five days every week and currencies are traded worldwide one of the major financial centers of London, Ny, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.
From the forex market there is little or no ‘inside information’. Exchange rate fluctuations are often caused by actual monetary flows as well as anticipations on global macroeconomic conditions. Significant news is released publicly so, at the very least in theory, everybody in the world receives the same news at the same time.
Large corporations trade about the FX market to manage revenues and expenses incurred in various currencies through hedging whereby a trade or multiple trades are opened in order 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 studying the chart reputation of an instrument (technical analysis). Unlike other asset markets, in forex it is actually easy to make money from a currency losing value as it is from the currency rising in value.