Forex: Foreign Exchange Markets

Forex: Foreign Exchange Markets

Did you know that the foreign exchange market is a market where you can buy and sell foreign currencies? It is very straightforward. If you want to go to another country, you will have to use their currency. You will have to exchange your country’s currency to the currency of the country that you are visiting. There are many places where you can do this. The foreign exchange market will determine the exchange rate for currencies, all across the planet. For example, 1 US dollar can be Rs.70 today, but it can be Rs.72 tomorrow. It keeps changing every single day, and you should keep track of it if you are a trader. I remember when I was about to go to the United Kingdom, I exchanged Rs.30,000, to GBP. I remember looking at the forex rates.

This particular market is also known to be termed as currency, FX or the forex market. The structure of this market is comprised of individuals, commercial banks, central banks, firms, exporters, importers, brokers, immigrants, tourists and investors. It cannot function without the above. It highly depends on all of the above to properly function. The foreign exchange market is also a system that does not have any physical location. It is completely done with the help of the Internet. As I am writing this particular guide, 1GBP is equal to 95 Indian rupees. I got to know about this, with the help of the Internet. It keeps updating every single day.


Did you know that this market operates 24 hours, every single day? It operates from 5 PM EST, every Sunday to 4 PM EST, every Friday. It also happens to be the worlds most liquid financial market, because it has tradings of trillions of dollars. The trading currencies in the foreign exchange market will always take place in pairs, so that the value of one of the currencies in the bear is relative to the value of the other. The global market also has to tiers. The very first one is also known as an interbank market, and the second one happens to be known as the over-the-counter market.

Did you know that the interbank market is one of the bigger banks when it comes to exchange and trade of currencies?

The over-the-counter market is the one where people and companies trade, and it is also very popular because there are many companies that provide you with online trading platforms.

Here are some quick points about the foreign exchange market.

  1. It is highly liquid.
  2. The dollar is the most widely traded.
  3. It has a very low trading cost.
  4. It is a very dynamic market.

It has excellent market transparency.

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