Foreign Exchange Blogspot
foreign exchange blogspot
Forex
What does mean the word forex?
What are its stakeholders?
What precautions should be taken by any Forex investor?
The word Forex comes from two English words Foreign Exchange, which means foreign exchange market. It is a market on which the stakeholders exchange the currencies of various countries through exchange rate which is the price of one currency against another one.
The Forex or foreign exchange market or currency market began in March 1973 with the floating exchange rate, which marked a new international financial system where currencies could float freely on the market, which removed the obligation of the central bank to intervene on the foreign exchange market to maintain the fixed exchange rate between its currency and another currency, mostly dollars.
The FOREX is a market that brings together various stakeholders who are banks, commercial companies, non-bank financial institutions, central banks and traders.
Banks are the most important Forex, because they intervene in foreign exchange operations involving large bank deposits. For example, a company like the U.S. Texaco which agreed to pay the sum of 1 000 000 Riyal a supplier to Saudi Arabia. The transaction on the Forex market involves the use of dollars from Texaco in the Bank of America and also requires the exchange rate between the currencies to determine the number of dollars for the previous sum.
Commercial companies are important elements on the Forex because they make many transactions (purchase or sale) in different currencies. For example, Apple sells computers to Europeans, Australians, the English. All these transactions require Forex determining the value of the dollar or the exchange rate with the euro, Australian dollar and the pound.
Non-bank financial institutions such as funds provide services related to currency transactions that require intervention on the Forex.
Central banks intervene in the Forex accordind to their monetary policy actions may have impacts on the national currency.
Traders comprised Forex institutions and ordinary investors like you and me are the recent arrivals on the Forex. These institutions offer services on Forex trading but also on raw materials such as oil, gold and silver ….
What precautions should be taken on any Forex investor?
Forex is an important market nearly 2 trillion dollars and very volatile which means that the possibilities of losses and gains are high, then it should take certain precautions that I can quote you in saying that the list ‘ is not exhaustive:
1. Studying the functioning of the Forex through fundamental analysis and technical analysis;
2. Inquire about the financial news that has a significant impact on Forex;
3. Judiciously use the leverage available through your Forex broker who can increase your and your losses. Often recommended a leverage of 100: 1 before using the leverage of 400: 1;
4. Establish a clear and precise plan of intervention in the Forex setting your gains and losses. This does not seem interesting to predict the losses but it is very important because if you do not you could lose your entire investment, that person does not want to. For example you can use OCO orders.
5. Choosing a good broker. Several factors play in determining your broker such as Forex demo account, initial investment, deposit and withdrawal, friendly platform, … ..
So the forex market is not like the others, it can be lucrative if you have sufficient knowledge, it can be expensive if you run head down. Forex is a market that can help you find financial success provided to implement the advice offered and sought by learning about and mastering you during your trading activity.
http://www.financial-investments-plus.blogspot.com
http://www.personal-finance-plus.blogspot.com
About the Author
http://www.financial-investments-plus.blogspot.com
http://www.money-management-plus.blogspot.com
http://www.personal-finance-plus.blogspot.com
Life of A Foreign Exchange Student in Japan: School
