What is Forex??

What Is Forex?

Forex (which is also known as the “Foreign Exchange Market,” “currency,” or “FX”) is the market where buyers and sellers complete transactions in foreign currencies. Investors strive to make money in this market according to the fluctuations in the values of different foreign currencies. It also exists to provide a way for banks and other institutions to have ready access to foreign currencies.

The foreign exchange market is a boon to international trade and investment. The presence of a foreign exchange market helps businesses convert their assets from one currency into another.

The Forex is a global market that exists because foreign convertible currencies are traded, and their rates of conversion can be measured against each other. The Forex market makes up the largest financial market in the world. It is so large that on an average day, Forex trades comprise roughly three trillion dollars worth of currencies! From this enormous amount, it is estimated that approximately 15 percent of that value is actually traded for goods or services. The remaining 85 percent of Forex activity is traded by speculators in the market. These speculators may be either individuals or financial institutions.

The foreign exchange market is different than other markets not only because it involves such high volumes of daily turn over. Foreign currencies provide a very liquid market with comparatively lower profit margins, and the nature of foreign currencies means that it is spread geographically throughout the world. Similarly, the Forex market is open for exceptionally long hours, opening at 22:00 on Sunday evening (UTC) and remaining open until the weekend begins at 22:00 on Friday evening (UTC).