The Forex Market

The Foreign exchange currency market (or as referred to; the Forex market) is the largest market in the world (in terms of cash values). It is very liquid and may be the most transparent one. Almost all major financial groups are taking part in creating this market, including governments, central banks, multinational corporations, insurance conglomerates, currency speculators and others.

Unlike other markets, there is no Forex central bank or any other managing institution. The market is a network of traders, connected by telephone and computers. This kind of market is an OTC (over the counter) or "inter-bank" market because most of the trades are between two counterparts over the telephone (or computer). However, there are three areas where most of the transactions are handled: United Kingdom, United States and Japan. Naturally, these three centers have a bigger influence over the market than other parts of the world.

Currently, the currency exchange market activity exceeds (daily, average estimation) two trillion US dollars (2,000,000,000,000$). The trading is on a 24h basis; begins each day in Sydney and spans west around the glob; from Tokyo to London to New York as the business day begins in the financial centers. As a result, the currency market is influenced by economical decisions, political changes and almost anything else much faster than any other market.

Unlike any other market, the foreign exchange market is close to Barter market (or more accurate, a mirror image of it); the trades are between different currencies (and not a currency for goods or service), this means that when a trader is buying a currency, (and becoming in a "long" position with the bought currency and a "short" position with the sold currency) he needs to sell another. Another result of this structure is the availability of sellers and buyers, which means endless opportunities.