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
turnover of well over US$1 trillion -- 30 times larger than
the combined volume of all U.S. equity markets.
"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).
There are two reasons to buy and sell currencies. 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.
For speculators, 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, Euro, British Pound, Swiss Franc,
Canadian Dollar and Australian Dollar.
Traditionally, retail investors only means of gaining access
to the foreign exchange market was through banks that
transacted large amounts of currencies for commercial and
investment purposes. Trading volume has increased rapidly over
time, especially after exchange rates were allowed to float
freely in 1971. Today, importers and exporters, international
portfolio managers, multinational corporations, speculators,
day traders, long-term holders and hedge funds all use the
FOREX market to pay for goods and services, transact in
financial assets or to reduce the risk of currency movements
by hedging their exposure in other markets.
Saletlx's,
combination of low margin and high leverage has changed the
way the 'Interbank' currency market operates. We have done
this by opening the doors of Forex to retail investors, giving
them the professional tools and services needed to trade
effectively in an independent atmosphere.
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 New York.
Unlike any other financial market, investors can respond to
currency fluctuations caused by economic, social and political
events at the time they occur - day or night.
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.
"Forex trading involves substantial risk of loss and is not suitable for all investors.".
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