FOREX Intro 101

What is Forex?
Simple!
Forex = Foreign Exchange market
FOREX is an international foreign exchange market, where money is sold and bought freely.
In its present condition FOREX was launched in the seventies, when free exchange rates were introduced,and only the participants of the market determine the price of one currency against the other through demand and supply.

Where is the Forex Market located
The forex market is not a physical place or central exchange.It is an over-the-counter market where buyers and sellers including banks,corporations, and private investors conduct business.In other words, the foreign exchange market, or FX market, is a network of financial institutions and brokers in which individuals, businesses, banks, and governments buy and sell the currencies of different countries.
They do so in order to conduct international trade, invest in foreign countries, or speculate on currency price changes". (Federal Reserve Bank of New York)
The simplest definition of foreign exchange is the changing of one currency to another.

Forex is the Richest on Earth.

Of course it is!Even the world's richest trade the Forex.
The Forex market is huge and is the largest financial market and most liquid in the world.
In September 1992 The Wall Street Journal estimated
the trading volume at $1 trillion per day.
Today, it is believed to have grown
in excess of $1.5 trillion per day.
In comparison to the daily trading volume averages
The Foreign Exchange market is :
5 times the volume of the U.S. Treasury Bond market ($300 billion/day)
150 times the volume of the entire U.S. equity market ($10 billion/day).
xxx times the volume of the entire Nigerian stock Exchange( )

According to the IMF, on the whole the volume is over 1 trillion dollars a day, and on some days it reaches 3 trillions.
About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies
into their domestic currency.
The other 95% is trading for profit, or speculation.This is where we the small traders belong.
The next lesson will be out on Friday, 7th September 2007.