Foreign Exchange Trade market shortly mentioned as FOREX is one of the huge currency trading centers in the world. It is also well known in the names of Fx, and Currency. Fx started to emerge in the year 1970, since then it is growing. It is a non-stop Currency trading market, where a large amount of currencies are traded among different nations.
The trading happens, when one participant buys a quantity of a foreign currency in exchange for paying another quantity of currency.
Foreign currencies are bought and sold across local and global markets steadily and continuously, with the help of brokers, in a large arena.
The purpose of Forex is to promote trade and investment. The investor’s main criteria would be to gain profit from the foreign currency movements. The investments of trader rely on increase and decrease in the value of currency, with reference to fluctuations in currency movements in foreign exchange market.
Foreign exchange trading occurs in pairs most of the time. For example, a trader may opt for USD for EUR. He must be aware of the exchange rate at that time of buying and selling the foreign currency. The exchange rate between USD and EUR may be changing year by year. He might have bought the USD for an exchange rate, which might have changed after a year, when he wants to sell it.
In order to attain a good profit in FOREX, the value of the currency, you buy must increase compared to the value of currency you opt to sell. As soon as the value of currency you have bought increases, just sell the other currency you have, then a valuable return will be your hands.
The major participants taking part in the FOREX are Government, Corporations, central banks, commercial companies, etc.
There are some unique features which speculate FOREX from other market;
The market’s Liquidity (causes remarkable change in currency movement with minimal loss of value.).
The method of Bulk trading (Even for small currency movements the profit will be large as trading is bulk).
24 hours working in the week days, except week-ends.
Low margin profit compared to other markets with fixed income.
Global daily foreign exchange trade turn-over per day was reported in April 2007; by the Bank of international settlements revealed that, it was US $3.2 trillion. Since then it is growing. It increased 41% in the period of 2007 and 2008.
The currency trading is almost inevitable for all the western countries which are in need for trading currencies like USD, EURO, POUND, and STERLING. So, FOREX will be growing on and on.