Forex is a foreign exchange market. This is one of the elements of the global foreign exchange market. The daily volume of trade at the FOREX foreign exchange market makes 5 trillion US dollars which exceeds the volumes of the global stock market many times.
The following organizations are the foreign exchange market participants. Central bank. It underpins the national currency. Commercial banks. They fulfil client requests and preserve the liquidity of the owned assets. Brokerage houses and financial companies are following. These organizations make a profit thanks to the management of financial assets and act as intermediaries.
The exchange is another element of the foreign exchange market. The exchange is a legal entity; we have already spoken about. It is an intermediary between Brokerage houses and financial companies. Private individuals, that is you and I are the last element of the foreign exchange market.
We have already defined the fact that we all are traders, one way or the other because we exchange currency for one reason or another. If we need to go on vacation or buy tickets online in currency, all of us refer to foreign exchange transactions.
But there are different kinds of trading. Passive and active. We buy and sell currency in order to pay for goods and services, so we are passive traders.
In order to become active trading participants, we need to buy and sell currency in order to make money out of the exchange rate difference.
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