What is Forex
By Admin Forex Eurabelarus | September 15, 2009
What is Forex?
Forex is the name of the largest worldwide market, where traders exchange foreign currencies. To understand this kind of market you have to know: 1. what is exchange currencies, 2. why is exchange currencies important for forex traders. 1. also if you are not an expert of macroeconomy, you have already exchanged currencies or have heard about this operation. For example if you are american and you go to Europe you have to exchange dollar into euro, because dollar is not the currency of european countries. Many people every year exchange currencies to travel or to buy products from other nations.
2. Exchange currencies is important for forex traders, because it is the basic activity to make profit. There is two kind of traders in the forex market: the international company owner and the speculator. To tell the truth, there are more participants, but their role will be explained on the page about forex participants.
So the international company owner has to exchange currencies more than once a month, because he buys goods very often. The speculator’s activity consists in controlling stock prices and exchange prices movements, because he has to determine the right moment to trade. Don’t forget that currency value is not every day the same, and the monetary situation has a fundamental role in the currency value change.
Forex is the the first market, where trader can carry out their transaction during night and day and holydays. The different local time of the financial centers enables this possibility: London, New York, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney. Moreover traders use simply a computer, they have not to go to the financial center.
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