last three decades Foreign Exchange market - briefly Forex
or FX, had integrated into the world's biggest financial market.
The volume of daily transactions is about 1-3 trillion of
US dollars. The trading instruments on this market are the
currencies of different countries, so the fluctuation of currency's
rates allows to gain a real profit.
Of course monetary assets of different countries
exchanged since the term money appeared as well as an idea
to obtain profit from currency's rates difference. Now it
is not a new idea, but the transformation of foreign exchange
market to the modern stage with an opportunity to conduct
conversional operations of such volumes arose only after an
introduction of floating rates regime by the state-members
of IMF. Within this regime's framework the rate of one currency
to another is defining only by the supply and demand on the
Presently Forex market is a global telecommunication
network of banks and different financial organizations. It
does not have any fixed trading place and time restrictions
- the trade starts on Monday morning in New Zealand and closes
on Friday evening in USA
The advantages of Forex market are:
Round-the-clock trading access: the ability
to trade for 24 hours a day;
Liquidity: the market works with a huge money
and gives the customers complete freedom to open or close
their position of different volume;
Leverage: an ability to use leverage. It decreases
requirements to the sum of the initial deposit (margin trade).
So in case you deposit 10 000 USD into your account you'd
have an opportunity to work with 1 000 000 USD (leverage 1:100);
Objectivity: no exterior regulated structures,
so the currency's rate is establishing in accordance with
current supply and demand on the market;
Globality: everyone can become a market participant
irrespective to the living place, as trading requires only
your skills and Internet access.
At present mostly all the operations on the
market are conducting only to obtain profit. With the development
of Internet and other means of communication this sector of
the financial markets becomes more accessible and attractive
for the investors of different levels.