While most people in the financial world believe the New York exchange is the pinnacle of financial trading, the FX market is the true leader. The Forex Market, as currency exchange is known, has a volume of around 1.5 trillion United States dollars daily. This is in excess of 100 times larger than the daily value of the New York Stock exchange (NYSE)
The great thing about Forex is that it is a worldwide market. It is known as an "interbank" market which means trades are conducted over the counter (OTC). OTC means trades are directly between the parties involved and do not go through a central exchange. The main centers for the Forex market are located in Sydney, New York, Tokyo, Frankfurt and London. Consequently, the Forex market operates essentially 24 hours a day. So we say, the Forex market is simply trading currency in one country for that of another country.
The proportion of the economic value of one currency to the other grows and decreases, and this ratio is what fuels the market. The trades consist of the concurrent purchasing of one currency, for example, United States Dollars (USD), and the selling of another, i.e. The European Euro (EUR).
The largest market in Forex trading is called the 'spot market' because sells are performed at once, or "on the spot". There are other components of Forex trading, such as futures trading, and Forward Outrights, which are slightly more involved than spot trading.
The great thing about Forex is that it is a worldwide market. It is known as an "interbank" market which means trades are conducted over the counter (OTC). OTC means trades are directly between the parties involved and do not go through a central exchange. The main centers for the Forex market are located in Sydney, New York, Tokyo, Frankfurt and London. Consequently, the Forex market operates essentially 24 hours a day.
So we say, the Forex market is simply trading currency in one country for that of another country. The proportion of the economic value of one currency to the other grows and decreases, and this ratio is what fuels the market. The trades consist of the concurrent purchasing of one currency, for example, United States Dollars (USD), and the selling of another, i.e. The European Euro (EUR).
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