This site is geared for the beginner investing in many different areas. Mainly we focus on the stock market, but at times we will discuss different vehicles that you can invest in. One of the more popular ways to invest lately is in what is called the FOREX. What is the FOREX? It’s an acronym for the foreign exchange.
For those who are not aware of what the foreign exchange is, it’s where the currency of the different countries are traded. The buying of one currency while simultaneously selling another. It’s the largest exchange in the world with the daily turnover exceeds $1 trillion. The pairing of two currencies are traded and valued against the other. A couple of examples are the US Dollar/Euro and the Japanese Yen/US Dollar. Most of the currency transactions will involve on of the major currencies (US Dollar, Euro, the British Pound, Swiss Franc, Canadian Dollar, Japanese Yen and the Australian Dollar.
The foreign exchange operates twenty-four hours a day through an electronic network of banks, corporations as well as individual traders. The exchange does not have a physical location where the trades are made like the other major exchanges do. The trading day for the FOREX starts in Sidney Austalia followed by Tokyo Japan and moves west around the world toward London, England and the New York. The big players in the FOREX are investment and commercial banks along with the exchanged traded futures and the registered futures commission merchants which consists of the ProEdgeFX. PorEdgeFX trading desk opens Sunday at 2:20pm EST and doesn’t close until Friday at 4:30pm EST.
The prices of the foreign exchange are influenced by the international trade flow as well as investment flows. In a lesser manner the exchange is also effected by the same things that influence the bond markets; economic and political conditions especially the interest rates, inflation and the stability of those countries. Since the impact is short lived, it gives investor the necessary diversification needed to protect against adverse movements in the equity and bond markets.
The exchange works in the same way the stock market works in regards to the bid/ask pricing and has the same type of spread between the two (bid/ask) just as equities do which is the cost of the transaction.
I have recently started play around in the FOREX as part of my investment strategy. I have taken it very slow in jumping in and making any big position in any of the currencies that are traded. I will say that I’ve learned quite a bit in the short time and will continue to educate myself about the foreign exchange world. As I learn more about FOREX I will share my knowledge and experiences with you, here at this site.
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I have also recently started play around in the FOREX as part of my investment strategy. It is an interesting journey I have been taking. Thank you for some insight on this topic
Twitter: joannegreco777
says:
Thank you. I try to help all that need it, especially the beginners. I didn’t have someone in my corner when I first started.
Great write up you have there, explained what foreign currency trading is in a nutshell and also the various factors that influences the exchange rates in the forex. Keep the great posts coming!
Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor