Introduction
The international currency market represents a complex system, where the actors of the market trade large sums of money at an exchange rate established at a certain date, having as purpose converting one currency for the other. The market was formed in 1970, because of the Bretton Woods agreement, but trading online FOREX only appeared a few years ago, encouraged by the increasing possibilities given by the internet. Here are the most important aspects that you must know about trading online FOREX.
The trading online FOREX market is huge, liquid, and it is growing spectacularly. This market is opened 24 hours a day, from Monday to Friday. Forex is a classical liquid market with an international character, as it has no local or central transactional location, and the majority of transactions are made with the telephone or internet.
History
The main players of the trading online FOREX market are the central banks, the commercial banks. However, the hedge funds and the investment funds also use this market for their transactions. The most important currency market is the inter-banking market where banks and corporations control the financial risk associated with the fluctuations of the course. It is a market where institutions trade huge volumes with an increased net worth.
The liquidity of the trading online FOREX market can reach to a value of 1-3 trillion dollars every day, being 30 times larger than the stock market in the USA. Practically, the currency market is the most liquid, dynamic and the most flexible capital market in the world, which makes it the most suited market for the private investor.
Features
The evolution of the currency market depends on technical factors, politic and economic. The informational flux is opened for the investor, ensuring the access to the latest news in the market.
Maybe the biggest disadvantage of the trading online FOREX market is the high risk connected with this activity. There is no established model of trading for the players of the market, so the investor has to know the risk that is assumed during a transaction, in order to take the best decision. This way, without a previous analyze, all the initial investment can be lost, and you can also suffer supplementary loses. This is why the advice of any beginner trader is to learn the language of the international market before entering the real market.
Tips and comments
The subject of trading online FOREX is represented by the international currencies, especially the referring ones: Euro, the US dollar, the Japanese Yen, the British Pound and the Swiss Franc. For each currency, there is a standard symbol, recognized around the world and approved at international standards. The symbol of a currency for a country is composed of three letters.
Of course, you will have to study the resources available free at your disposal before engaging in such an initiative. Trading online FOREX is not easy, and if you don’t understand the market, you will surely suffer losses. In fact, 85 % of the players on the FOREX market lose some serious money, and if you don’t want to be one of them, make sure you understand the particularities of this market.
