Why Are Many Interested In Forex Trading?
The Foreign Exchange Market (Forex) is the largest financial market in the world. The daily amount of money traded on the Forex market even reaches billions of US dollars. The forex players involved with trading this currency include
- big banks,
- central bank,
- currency speculator,
- multinational companies,
- financial institutions and
- sometimes the government also plays a role in stabilizing the value of the currency.
Nowadays there are many retail traders who also participate in this forex market with the help of online brokers – commonly called forex brokers.
There is no exchange or meeting place for buyers and sellers on the Forex market. All trades are carried out through computer networks among traders in various parts of the world. In addition, unlike the stock market, the forex market is open 24 hours per day, because it follows time zones throughout the world. A market player in Hong Kong may be transacting with market players in Australia, while market participants from America are sleeping.
There are several market systems in Forex trading.
First, there is a spot market. Spot market transactions are based on the current currency value (real time price).
In addition there are two other types of forex markets, namely the forward and futures markets. In the forward market, the buyer and seller agree to the exchange rate and date of the transaction that has been set for a certain time in the future.
On the futures market, currency prices are bought and sold based on the size of the contract and the due date. Futures trading takes place in the public commodity market.
Unlike stocks, currencies are traded with each other. If the stock price is set (quote) of the price per share. Whereas currency exchange rates are pegged to the exchange rates of other currencies.
So, if you see the exchange rate of a currency on a television program or other media that says USD / IDR = 15,000, that means that the value of $ 1 is equal to 15,000 rupiah.
The Forex market is generally considered to be less stable than the stock market.
This is because in one trading day it can reach 100 pips, even more. However, currency movements in the forex market move according to the demand and supply of market participants. In addition, economic news released every day makes price movements very high.
If you are interested in a flexible investment, why not try to start investing in forex trading?