Starting in Forex Market
The foreign exchange market exist whenever one currency is traded for another. FOREX (FOReign EXchange market), refers to an international exchange market where currencies are bought and sold, World has moved from barter system to cash transaction where each currency plays its own role depending upon the strength of its economy, since the strength of economy determines the bargaining power of the currency.
Forex market by far the largest market in the world, in terms of cash value traded, and includes trading between local banks, MNCs banks, central banks, institutional trades, multinational corporate , governments and other financial markets and institutions.
Transactions in foreign currencies are not centralized on an exchange, unlike say any stock exchange, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealersweiter…
FOREX market has couple of unique charecterstics because of number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.
Another somewhat unique characteristic of the FOREX money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.
To summerize, forex market is avry fluid boundaryless dynamic market and activities in forex market also shows the health of economy too.