The term Forex is no longer unfamiliar to financial investors and is getting more and more popular. However, for most people outside this field, not everyone knows about Forex. So what is Forex
Forex is the abbreviation of "Foreign Exchange".
The Forex market, also known as the Foreign Exchange market, is the most active trading market in the world, with an average daily trading volume of $ 4 trillion. Foreign exchange trading is the simultaneous operation of buying one currency and selling another currency, i.e always trading in pairs. Example: Euro / Dollar or Dollar / Yen.
More than 85% of daily transactions involve major currencies, including the US dollar, JPY, EUR, GBP, Swiss Franc (CHF), The Canadian dollar (CAD) and the Australian dollar (AUD).
Unlike the stock market and other financial markets, the Forex market does not have a trading center. The foreign exchange market is a decentralized (OTC) or inter-bank market; transactions are made between two parties via telephone or electronic network through brokerage organizations or individuals. The foreign exchange market is called the interbank market because its history has been dominated by banks including central banks, commercial banks and investment banks. However, the share of participants is growing rapidly and now includes large multinational corporations, global money management organizations, agents (IBs) and individual investors. Unlike other financial markets, investors can cope with currency fluctuations caused by economic, social and political events regardless day or night.
The foreign exchange market is divided into four main sessions. Opened in Sydney (Australia) and closed at New York (US)
It can be seen that the beginning of the London trading session was preceded by the end of the Tokyo session and the end of the London trading session coincided with the opening of the New York market. So these are the times when the market is most active with more volume. Winter trading hours (EST) open one hour later than in the summer (EDT). But because Sydney is in the southern hemisphere (reversing seasons), when the New York market is one hour back, Sydney opens an hour ahead, means two hours apart.