Forex Market: Key Features

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Forex Market

The Forex market is the conduct of trading, investment, speculative operations carried out with currency. Seen from a formal point of view, Forex is not structured in the form of an exchange. Everything is different, the market is an informal network of trade property relations arising between participants all over the planet.

Parties to this relationship may be banks, investment institutions, dealers, pension funds, brokers, insurance companies, private investors, as well as transnational corporations.

In the Forex market, they trade all major currencies. At the same time, the main role belongs to credit institutions, which are called market makers of the exchange. This name is due to the fact that it is they who carry out active-type trading operations, offering to buy or sell currency to their customers or counterparty banks.

The term Forex is considered in a narrower sense compared to the West. Our exchange is used as speculative currency trading through banks or dealing institutions, which is carried out using leverage.

That is, in fact, marginal currency trading takes place.
Many experts argue that the common terms the international Forex and the international Forex market are simply incorrect, since this exchange initially provides only for currency trading at the international level.
All operations that are carried out on the Forex market can be divided into several types.

These include:

– speculative;
– hedging;
– regulatory.

Unlike auction and futures exchanges, the named market is, indeed, interbank and over-the-counter. This means that there is no universal exchange for determining a pair of currencies. The market operates round the clock.

That is, all market participants are always in full combat readiness. Thus, the Forex market is an uninterrupted and continuous trading of currencies, because if the Asian session ends, the American begins and so on.

Traders immediately respond to information coming to the Forex exchange, rather than expecting markets to open. Indeed, for the most part, other markets do not have a round-the-clock mode. As in any market, Forex has a term called spread. It means the difference between the purchase price and the selling price of the currency.

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