The global financial market of currency exchange is called Forex (contraction of the words foreign exchange). It emerged in 1976 after the global economy has moved from the "gold standard" for the free exchange of currencies. The necessity of this step, explains that it was necessary for the free flows of funds between the various states.
The original purpose of "Forex" is a currency exchange, but over the time people have learned to make a difference in currency exchange rates and such speculation became a source of decent income for many. Because exchange rates are very unstable, that makes buying and selling the currencies very profitable.
BENEFITS OF "FOREX"
HIGH YIELD OF TRADE
"Forex" has become not only a profession but also a wonderful way to preserve and increase capital for many. Yield trading on it is much greater than the rate of inflation. Traders can get the highest personal income.
MAKING A PROFIT REGARDLESS OF MARKET TREND
You can trade on the "Forex" with profit, regardless of whether exchange rates are rising or falling. As you know fall of one currency causes a rise of another. This advantage distinguishes the foreign exchange market, for example, the stock, which is often dominated by only one trend that complicates trade and does not allow to profit from short-term transactions.
The above feature of the “Forex” protects the ones who are trading on it from the effects of the economic crisis. If this occurs, the stock market can collapse, and the exchange will continue to work as nothing occurred.
ALL-DAY OPPORTUNITY TO EARN
Entering into transactions on "Forex" can be 24 hours a day. This is possible because its trading platforms are located all over the world in different time zones. Trade stops only at the weekends. Well, 5 days a week, "Forex" is available.
THE MARKET IS NOT LOCATED SPECIFICALLY
"Forex" has no physical location. Transactions on it are made with the help of computer programs-terminals. It is possible to buy and sell currencies from anywhere in the world, if there is an availability of Internet access.
INTERESTING PROCESS OF TRADE
Trading the currencies on “Forex" is not only profitable but also interesting. To increase profits, it is necessary to follow the world news and to learn the new features of the market.
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Forex market participants
The central banks of different countries
Central banks affect the rates of their currencies by buying or by selling them on the domestic interbank market. In addition, they provide useful indicators of credit (for example, the refinancing rate), which can also differ significantly the exchange rates of national currencies.
Commercial banks are the main market makers of "Forex". They "make the market" because, all the exchange transactions are held by them. This forms the general supply and demand, which determines the exchange rate.
Companies Importers and Exporters
A huge number of transactions in the financial markets are held by the companies engaged in export or import of various products in their countries. They sell the resulting foreign exchange for the national. On the other hand they have to buy currencies of different countries, where their international partners stay.
The main purpose of various funds (investment, pension, insurance, hedge) - is making a profit. The amount of such funds are large, so their transactions on "Forex" they make in large amounts, which also greatly affects the value of a monetary unit.
Dealing centers of "Forex"
These are the non-bank institutions that provide its customers the opportunity to trade in the financial markets with small amounts of their own trading capital. In this case, customers can not only work in the market, "Forex", but also to trade in the markets of CFD (Contract for Difference). Trade via dealing centers, is usually made with special programs, such as MetaTrader from TeleTrade.