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 About Forex
The Foreign Exchange market, also referred to
as the "Forex" or "FX" market is the largest
financial market in the world, with a daily
average volume of well over US$1.9 trillion --
30 times larger than the combined volume of all
U.S. equity markets. The size and liquidity of
the Forex market offers unparalleled trading
opportunities.
"Foreign Exchange" is the simultaneous buying
of one currency and selling of another. Currencies
are traded in pairs, for example Euro/US Dollar (EUR/USD)
or US Dollar/Japanese Yen (USD/JPY). The first
listed currency is known as the base currency,
while the second is called the counter or quote
currency. The base currency is the "basis" for the
buy or the sell. For example, if you BUY EUR/USD
you have bought Euros (simultaneously sold US
Dollars). You would do so in expectation that the
Euro will appreciate (go up) relative to the US
Dollar.
The best trading opportunities
are with the most commonly traded (and therefore
most liquid) currencies, called "the Majors".
Today, more than 85% of all daily transactions
involve trading of the Majors, which include the
US Dollar, Japanese Yen, British Pound,
Euro, Swiss Franc, Canadian Dollar and Australian
Dollar. Using the IPAM Managed FX Systems we are
focusing on the most traded and liquid
currencies in the world.
A true 24-hour market, Forex trading begins
each day in Sydney, and moves around the globe as
the business day begins in each financial center,
first to Tokyo, London, and then New York. The
spot FX market is unique to any other market in
the world. Somewhere around the world, a financial
center is open for business, and banks and other
institutions exchange currencies, every hour of
the day and night with generally only minor gaps
on the weekend.
The FX market is considered an Over the Counter
(OTC) or 'interbank' market, due to the fact that
transactions are conducted between two
counterparts over the telephone or via an
electronic network. Trading is not centralized on
an exchange, as with the stock and futures
markets. This characteristic of the Forex makes it
an ideal market for the use of computer technology
and technical analysis to consistently seek out
favorable trading opportunities.
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