The forex trading market (forex, FX, or currency market) is a worldwide, decentralised, over-the-counter financial industry for trading currencies. This is basically the largest financial market worldwide using a volume of over $1.5 trillion a day worldwide*. Total trend trading volume is more than 3 times the entire from the stocks and futures markets combined.
With Pepperstone, you will get direct accessibility forex ‘spot’ market – a market that deals in the current price of a financial instrument.
Traditionally, retail investors’ only methods of accessing the forex trading market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has increased rapidly as time passes, especially after exchange rates were capable to float freely in 1971. Today, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long term holders and hedge funds all use the FOREX market to pay for products or services, transact in financial assets or to reduce the potential risk of currency movements by hedging their exposure in other markets.
There is no central marketplace for foreign exchange; trade is carried out over-the-counter. The forex market is open round the clock, five days every week and currencies are traded worldwide on the list of major financial centers of London, Ny, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.
Inside the forex market there is little or no ‘inside information’. Exchange rate fluctuations are usually a result of actual monetary flows along with anticipations on global macroeconomic conditions. Significant news is released publicly so, at the very least in theory, everybody in the world receives the identical news concurrently.
Large corporations trade in the FX market to regulate revenues and expenses incurred in several currencies through hedging whereby a trade or multiple trades are opened to be able to attempt to minimize in the losses in other trades.
Investors trade currencies for profit. Most fx trading is speculative by analyzing market and political news (fundamental analysis) and studying the chart background of an instrument (technical analysis). Unlike other asset markets, in forex it is easy to profit from a currency losing value since it is in the currency rising in value.