Explaining the Forex Industry

The Inter Bank Foreign Exchange Market (IBFXM or FOREX market) is an international market place where trading takes place on the world’s major currencies such as the United States Dollar, the Swiss Franc, the Euro, the Japanese Yen, and British Pound.

The Currency Market is made up of approximately 5000 Trading Institutions. International Banks, Government Central Banks, Commercial Companies, Brokerage firms and Individual Speculators.

Principally the market exists to enable major financial institutions, businesses and governments to protect themselves from adverse fluctuations in currency values thereby enabling them to manage their risk in international trading. The bulk of the trading is between 300 large international banks which process transactions for large companies and governments and for their own accounts.

However, there is also the “speculator” segment in the Forex market. Speculator traders and investors who invest money to buy and sell foreign currencies to profit and take advantage from the constant price fluctuation of foreign currencies. Banks are the largest speculators in Forex!

Forex trading is not bound to any one floor or specific market and are done electronically between a network of banks continuously over a 24 hour period.
There is no centralized regulated exchange for trading activity and trading occurs over the Internet at locations worldwide, resulting in additional risks for this type of trading which you should be aware of before entering this market.

The advent of the internet has opened a whole new world for the small investor allowing him to trade this profitable market place from the comfort of his dwelling or office. All trades are calculated on very sophisticated trading software systems and finally executed via a designated dealing desk.

Currency trading is the speculation of the movement of one currency against another on worldwide dealing platforms. There are many different currency pairs to choose from and we can therefore take the best possible transaction. We trade almost exclusively in the major currencies.

GBP- Greater British Pound 
EUR- The Euro 
CHF- Swiss Frank 
JPY- Japanese Yen 

In the Forex market currencies are always priced in pairs and all trades result in the simultaneous buying of one currency and the selling of another. The objective when trading currencies is to exchange one currency for another in the expectation that the market price will change so that the currency you bought has increased its value relative to the one you sold.

If you have bought a currency and the price appreciates in value, you must sell the currency back in order to lock in the profit. The reverse is equally true. If you have sold a currency and it depreciates in value you must buy it back in order to lock the profit in. 

NOTE: Forex trading is not conducted on a regulated exchange and as a result, there are additional risks associated with this
             type of  trading.

Demo trade RISK FREE for 30 days. With a demo account and software, you can practice currency trading at your own pace, using the same real-time data and quotes available to Live Account holders.

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