imply put, the Forex is an immediate buyer or seller for
the foreign exchange any of the major currency pairs.
market. It’s where Most of this trading is done for
travelers, banks, and companies profit; only five percent of the
that do business internationally trades made each day are for the
change money, in effect buying purpose of changing currencies
one currency and selling another. for business or travel.
Profits are made from the
The Forex market is also so
difference in value between the large that it cannot be
two currencies (the exchange manipulated. Even powerful
rate). Because currencies are no central banks can’t force the
longer tied to the gold standard, market to do their bidding, as
exchange rates are constantly the Bank of England found out in
fluctuating. Speculators trade 1992. When the BoE used its
currencies with the expectation reserves to support the pound
that one will gain in strength against the Euro, investors
against the other. These trades traded against the pound and by
are leveraged, with a small sheer numbers overwhelmed the
downpayment controlling a much BoE. It’s rumored that one
larger sum, so even small changes investor, George Soros, made a
in value can create large profits profit of U.S. $1 billion
or losses.
overnight.
The Forex is the mother of all
The Forex is a completely
markets, with trading of more virtual marketplace. There’s no
than U.S. $1.5 trillion daily. building where buyers and sellers
That’s more than one hundred meet, or where brokers hang out
times the size of the New York looking for action. All trading
Stock Exchange. Because the takes place over the telephone or
market is so large, it’s on the Internet. Small investors
extremely liquid; there’s always trade through currency brokers,
who in turn place their orders investor can take advantage of
through large banks. Commissions the influence of that
are low and are built into the announcement on the country’s
exchange rate. currency—even if it’s taking
It was once said that the sun place during his night.
never set on the British Empire.
The Forex used to be closed to
The same can be said for the small investors. It was the
Forex trading “day,” which lasts private playground of banks,
roughly six days. It opens in large corporations, and the major
Sydney with the local Monday players in the money-making game.
morning, then moves with the sun But a change of laws in 2000
to Tokyo, Frankfurt, London, and opened the field to everyone. Now
finally New York, ten back around online Forex dealers offer
again to Sydney. It closes in New multiple options for the small
York on Friday evening. This trader or investor, with trading
means that, at any time of the accounts as low as U.S. $300.
day or night during each work
week, some currency, somewhere
around the world, is actively
trading. The clock may say it’s
midnight, but there are still type="text/javascript">
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