What is Forex?




What Is Forex?

What is forex part I
Foreign Exchange Market

Finally we have come down to the most asked question “what is forex”. This is the question which a lot of people ask almost on daily basics and unfortunately they barely get a suitable answer or they don’t just grab the concept at all. Now, let me explain what that’s mysteriously word means in a nut shell.

FOREX means Foreign Exchange; it is coined out of those two words “FOReign EXchange” though sometimes, people can shorten the word to “FX”.

It may amaze you that the forex market is the largest financial market in the world, with a volume of over $3 trillion a day. Wow!, so I believe you can see why banks, hedge and mutual funds, financial institution and any firm that deals on currencies what to join this market.




Which Currencies Are Traded in The Forex Market?

Now, I believe you all know what “forex” is. I think it’s the right time you discover what is traded in this market. Please note that food-stuffs, toiletries and house hold items ARE NOT traded in this market.

Only currencies are allowed to be exchanged in the forex market.

Below are some of the currencies that are traded in the forex market.

NOTE: The currency symbol always has 3 latters example USD. Where the first 2 latter is the country where the currency is used USD – United State Dollars.




SYMBOL COUNTRY CURRENCY NICKNAME
USD United States Dollar Buck
EUR European Union Euro Fiber
JPY Japan Yen Yen
GBP Great Britain Pound Cable
CAD Canada Canadian Dollar Loonie
AUD Australia Australian Dollar Aussie
NZD New Zealand New Zealand Dollar Kiwi
CHF Switzerland Franc Swissy

 




When Can Currencies Be Traded in The Forex Market?

The forex market is the only market in the world that is open 24 hours a day unlike others that have a closing period.

It may surprise you to know that somewhere around the world a financial center is open for business that is, when the Asians are getting ready for bed, the Europeans and Africans are getting up for the day and are later join in by the Americans. So it doesn’t matter which part of the world you are in, you can always catch the train.

Below is a table containing the time in GMT+1 which the major market in the world open and close.




MAJOR FINANCIAL MARKET TIME IN GMT+1
Tokyo Market Opens 10:00 pm
Tokyo Market Closes 7:00 am
Frankfurt Market Opens 7:00 am
Frankfurt Market Closes 3:00 pm
London Market Opens 8:00 am
London Market Closes 4:00 pm
New York Market Opens 1:00 pm
New York Market Close 8:00 pm
Sydney Market Open 9:00 pm
Sydney Market Closes 7:00 pm

 




As a bonus, I decided to add this, as I perceive that most of you are still hungry for more knowledge.

The question which probably might be playing in your mind might be “which currency is traded the most?”

It is no magic that the dollar is the most traded currency in the exchange market, do you still doubt? When was the last time you bought an item from amazon or you paid for an international services, did you notice the currency which was quoted there. It’s the mighty USD

The USD share of 86% of all transactions, follow by EUR which share is second at 37%, while that of the YEN is third at 16.5%.

The chart below shows global foreign exchange activity.

Currency Distribution
Currency Distribution

You can still read more articles, which will help you to be profitable HERE




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