The foreign exchange market (forex, FX, or currency market) is a worldwide, decentralised, over-the-counter financial niche for trading currencies. This is the largest financial market in the world by using a level of over $1.5 trillion a day worldwide*. Total see here volume is well over 3 times the entire of the stocks and futures markets combined.
With Pepperstone, you will have direct access to the forex ‘spot’ market – a market that deals in the present cost of a financial instrument.
Traditionally, retail investors’ only method of gaining access to the forex trading market was through banks that transacted a lot of currencies for commercial and investment purposes. Trading volume has increased rapidly as time passes, especially after exchange rates were able to float freely in 1971. Today, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long-term holders and hedge funds all use the foreign currency market to purchase goods and services, transact in financial assets or reduce the chance of currency movements by hedging their exposure in other markets.
There is no central marketplace for forex; trade is carried out over-the-counter. The foreign exchange market is open 24 hours a day, five days per week and currencies are traded worldwide one of the major financial centers of London, The Big Apple, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.
Inside the foreign currency market there is little or no ‘inside information’. Exchange rate fluctuations tend to be due to actual monetary flows in addition to anticipations on global macroeconomic conditions. Significant news is released publicly so, at least theoretically, everyone in the world receives a similar news concurrently.
Large corporations trade about the FX market to regulate revenues and expenses incurred in different currencies through hedging whereby a trade or multiple trades are opened so that you can try to minimize in the losses in other trades.
Investors trade currencies for profit. Most forex currency trading is speculative by analyzing market and political news (fundamental analysis) and studying the chart reputation of an instrument (technical analysis). Unlike other asset markets, in forex it is easy to cash in on a currency losing value because it is from the currency rising in value.