Forex, the art of buying or selling money!
Any one who has ever been on a foreign trip has had experience with currency trading.
The value of each currency when it relates to another is what the Foreign Exchange is all about. If the foreign trip you take is Europe for example, you would have to take some of your dollars and exchange them for Euros.
The fact is that it would take quite more than a single Dollar right now to purchase a single Euro is a different story though and far from me to suggest an alternative destination! A glass of Chardonnay on the terraces of Paris is more than worth it in my opinion, and that is as far as I’ll go in my recommendation of the local delicacies.
The Forex Market in indeed the value of a single currency against the other! For example if you were to purchase one Euro today, you would have to pay 1.58290 USD.
Since transactions are between two currencies at the time, they are also called “pairing”. The fact that it took 1.58290 USD to purchase that Euro can be translated in forex terms as: EUR/USD at 1.58290. What happens when Euros are used to purchase Dollars is just another “Pairing” only this time it is reversed. For example: USD/EUR at 0.631671.
If you were a Japanese citizen wanting to travel to Europe for example, the transaction would cost you 161. 178 JPY for a single Euro. Because the dollar currency is not involved in this transaction, it is no longer referred to as a pairing, but rather a “Cross” rate or EUR/JPY at 161. 178
Moving on to the various Foreign Exchange (Forex) Systems
When it comes to the Forex Market, there are only two systems available. A Fixed Foreign Exchange Market ad a Flexible one.
The system is Flexible when the Central Bank controls the valuation of each currency against each other based on the principles of supply and demand. A Fixed Forex Market System applies when the Bank acts as a buffer between currencies and has to buy or sell in order to temper the effects of currency market price fluctuation. In order words for each price increase of one currency, the Central Bank must sell in order to compensate for the increase.
Likewise, when a currency market price decreases, then the Bank must now buy more of that currency so that the market valuation for that currency is re-established. Just like a Pendulum swings in an ever lasting attempt to reach a status where the swinging movement stops, so that the Bank act to stop currency fluctuations until the balance is re-established.
How much is it all worth it then?
The Forex Market is the biggest financial market worldwide. When it comes to money, there isn’t anything like it out there, which makes this market a so very yummy proposition for all of you potential forex trading killers out there. In fact there is much money involved in this market that you need a number with 13 digits to represent to value of a single day’s trade. That would be a 2 with 12 tidy zeros aligned right next to it. For a Forex Killer Trader, that is “just” 2 trillion USD Or as my wife likes to repeat aloud “two thousand million dollars” punctuating between each word as she hands me my lunch sandwich every day on my way to work and as for, 2,000,000,000,000 is enough to make me dizzy!
To make Forex Market even more unique to traders, it is an over the counter market which operates throughout a network of computers where individuals, banks and corporations trade currencies from one another. This and the fact that it is a market open 24 hours a day make Forex Killer a uniquely well placed opportunity for anyone interested in opening up a home business whilst retaining the affection of more “traditional” businesses out there.
FX Traders (Forex traders) buy and sell to and from each other and this process is then fed into these networked computers to then be displaced on official quote screens.