Trading on the foreign exchange market is fundamentally different from securities and derivatives trading. He takes over the counter instead of solely on the platforms specialized forex broker. Its essential feature is the immense liquidity, virtually uninterrupted trading activity, the low costs and the large, integrated financial leverage in the trading platforms.
The Forex market every day to be implemented around 1.6 trillion U.S. dollars. The foreign exchange market is the mirror image of the world trade, which is growing rapidly due to globalization and the consequent closer integration of the world economy. The Forex Market Players are accordingly to the big world of finance: Internationally active banks, insurance companies, institutions like the IMF and World Bank, and - most important - the central banks of the world acting in direct communication with each other. Foreign currencies are traded around the world. By the time shift of investors Forex market is therefore open six days a week around the clock.
Measured in central European time trading begins on Sunday and ends on the night of Friday to Saturday. In between there are no breaks, so that problems with gaps (ie, price gaps between trading periods) occur, as they are known in the stock trading does not. Forex trading is very inexpensive.
The market makers charge their customers usually no fees or commissions. They make their money exclusively with the bid-ask spread, which is between the buying and selling rates on the platform. These amounts in the major currency pairs - say, EUR / USD - to an average of two so-called pips. Price changes are measured in pips in the forex market. The exchange rates on Forex market are represented with four decimal places. A pip is a change of one unit on the fourth decimal place. Another typical feature is the financial leverage that allows small investors to move large positions in the currency market, without taking out a loan and to take existential risks.
No comments:
Post a Comment