Read to Find Out More About Forex

3 min readDec 18, 2020

Forex is also known as the currency market,

FX or foreign exchange market. Forex is a platform or market where one particular currency is exchanged for another. Forex encourages foreign or international investment and trade as it enables the conversion of currencies. There are a number of organizations or multinational companies that pay expenses as well as wages to people residing in different countries and so that they take the help of Forex.

The foreign exchange market or Forex is a liquid financial market. Traders or organizations who are mainly involved in this market are the central banks of different countries, large banks, currency speculators, institutional investors, financial organization, corporations and governments of different countries. A rapid growth is witnessed in the daily average turnover if we consider the global foreign currency exchange and other related markets.

A very important part of Forex or the foreign exchange market comes from the commercial companies that need foreign currency in order to pay for various goods and services. The central bank of various countries also plays an important role in this particular market. These banks try to control inflation, interest rates and the money supply. They also have unofficial as well as official target rates for the respective currencies of their countries. In order to stabilize the market these commercial banks may also use a certain part of their foreign exchange reserves.

When we are talking about the foreign currency exchange market, we need to mention about the foreign exchange fixing. This is fixed or determined by the national banks of several countries. The main reason behind the foreign exchange fixing is that the central banks utilize the exchange rate as well as the fixing time to understand the behavior of the currency of their respective nation. The Forex operates twenty four hours of the day except on the weekends.

The Forex market is completely different from the stock market in the respect that the former is classified into different levels of access. At the most highest position is the inter-bank market, comprising of the largest security dealers and commercial banks. When we go down the different levels of access we find that the difference between the ask price and the bid price widens. This happens as a result of the volume. The levels of access regarding the foreign exchange market mainly depend on the amount of money which they use for trade.

One problem many traders encounter is staying too long in a profitable position that they don’t realize when the tide turns and the downward trend begins. There may be reasons why a trader can overstay in a position until it becomes too late or unprofitable and some of them include:

Failure to have predetermined exit criteria: There are many traders who don’t have any developed criteria regarding when to know it is time to leave a certain position. …

Read to Find Out More About Forex

Written by Mary G Cathey