Important Facts About
FOREX
Most experienced traders
consider that the best
and most profitable of
the capital markets is
the FOREX market. During
many years FOREX trading
had been the sole domain
of major banks, large
financial institutions
and countries central
banks; for example the
U.S. Federal Reserve
Bank. But these days,
thanks to the internet
the market has been
opened to everyone
willing to learn the
best techniques in forex
trading and with the
intention of making
substantial profits as
the before mentioned
institutions that
annually and
consistently make pretty
high profits from
trading in the Foreign
Exchange market.
Forex is a market that
is continually
oscillating and in
consequence with good
trading opportunities
during the whole trading
day; this behavior is in
part due to the increase
in global trade and
foreign investments
during the last two
decades that has made
the economics of all
countries more dependent
upon one another. This
means that as a
country's currency
fluctuates as a result
of economic activity it
affects the currency of
other countries. For
example; economic
factors usually affect a
currency by altering the
interest rate structure
and these will either
appreciate or devalue
the currency of that
particular country and
reflect the monetary
health of its economy.
It is known that some
banks allocate as much
as 20-30% of their funds
into the FOREX market,
making 40-60% of all
their profits trading
currencies. In fact
there are experts that
consider that banks will
cease their loan
transactional business
in a few years, and
better focus on currency
trading as their primary
revenue source.
The forex market has
five major currencies:
US Dollar, Japanese Yen,
British Pound, Euro and
the Swiss Franc. It is
due to their great
popularity in world's
commerce transactions
and its high activity
that these five
currencies account for
over 70% of North
American trading. Of
course there are other
tradable currencies;
they include the
Canadian, Australian and
New Zealand Dollars.
These minor currencies
account for 4% - 7% of
the total market volume.
Together, all this five
majors and minors
currencies constitute
the backbone of the
FOREX market.
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