The foreign exchange or ‘forex’ market facilitates the exchange of one currency for another. Exchanges occur in the ‘Spot FX’ or 'Interbank' market when buyers and sellers agree on the price at which they are willing to transact a trade.
Turning over in excess of 5.3 trillion dollars per day, compared with just 50 billion dollars of equities traded on the NYSE, currencies are the most heavily traded instrument worldwide and offer a highly liquid market for speculators.
Trading in forex is simply the act of buying one currency while selling another, and the fx market therefore attracts both those who need to convert currencies in order to facilitate trade, those who need to hedge their exposure to a particular currency, and pure speculators who aim to profit from changes in the price relationship between two currencies.
The value of currencies rise and fall in relation to one another due to a wide range of factors which includes both world events and the intervention of national banks. The collective action of speculators also drives price change. Forex traders speculate on how prices will change in the future with the goal of profiting when they are able to accurately predict the direction of the markets.
Forex markets trade internationally 24 hours per day from Sunday evening through to Friday night, with trading following the timezones through opening of sessions in the Asian, European, and US markets. The ease of access to the forex markets around the clock is one of the main attractions for speculators, who know they are unlikely to become trapped in adverse overnight price movements when stock exchanges are closed. Indeed, 24 hour access means round- the clock opportunities.
One of the key elements behind forex’s popularity is the fact that forex markets are open 24-hours a day from Sunday evening through to Friday night. Trading follows the clock, opening on Monday morning in Wellington, New Zealand, progressing to Asian trade spearheaded out of Tokyo and Singapore, before moving to London and closing on Friday evening in New York.
Turning over in excess of 5.3 trillion dollars per day, compared with just 50 billion dollars of equities traded on the NYSE, currencies are the most heavily traded instrument worldwide and offer a highly liquid market for speculators.
Trading in forex is simply the act of buying one currency while selling another, and the fx market therefore attracts both those who need to convert currencies in order to facilitate trade, those who need to hedge their exposure to a particular currency, and pure speculators who aim to profit from changes in the price relationship between two currencies.
The value of currencies rise and fall in relation to one another due to a wide range of factors which includes both world events and the intervention of national banks. The collective action of speculators also drives price change. Forex traders speculate on how prices will change in the future with the goal of profiting when they are able to accurately predict the direction of the markets.
Forex markets trade internationally 24 hours per day from Sunday evening through to Friday night, with trading following the timezones through opening of sessions in the Asian, European, and US markets. The ease of access to the forex markets around the clock is one of the main attractions for speculators, who know they are unlikely to become trapped in adverse overnight price movements when stock exchanges are closed. Indeed, 24 hour access means round- the clock opportunities.
One of the key elements behind forex’s popularity is the fact that forex markets are open 24-hours a day from Sunday evening through to Friday night. Trading follows the clock, opening on Monday morning in Wellington, New Zealand, progressing to Asian trade spearheaded out of Tokyo and Singapore, before moving to London and closing on Friday evening in New York.