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What is Forex?

FOREX — the foreign exchange market or currency market or Forex is the market where one currency is traded for another. It is one of the largest markets in the world.

Some of the participants in this market are simply seeking to exchange a foreign currency for their own, like multinational corporations which must pay wages and other expenses in different nations than they sell products in. However, a large part of the market is made up of currency traders, who speculate on movements in exchange rates, much like others would speculate on movements of stock prices. Currency traders try to take advantage of even small fluctuations in exchange rates.

In the foreign exchange market there is little or no 'inside information'. Exchange rate fluctuations are usually caused by actual monetary flows as well as anticipations on global macroeconomic conditions. Significant news is released publicly so, at least in theory, everyone in the world receives the same news at the same time.

Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar.

Unlike stocks and futures exchange, foreign exchange is indeed an interbank, over-the-counter (OTC) market which means there is no single universal exchange for specific currency pair. The foreign exchange market operates 24 hours per day throughout the week between individuals with Forex brokers, brokers with banks, and banks with banks. If the European session is ended the Asian session or US session will start, so all world currencies can be continually in trade. Traders can react to news when it breaks, rather than waiting for the market to open, as is the case with most other markets.

Average daily international foreign exchange trading volume was $4.0 trillion in April 2010 according to the BIS triennial report.

Like any market there is a bid/offer spread (difference between buying price and selling price). On major currency crosses, the difference between the price at which a market maker will sell ("ask", or "offer") to a wholesale customer and the price at which the same market-maker will buy ("bid") from the same wholesale customer is minimal, usually only 1 or 2 pips. In the EUR/USD price of 1.4238 a pip would be the '8' at the end. So the bid/ask quote of EUR/USD might be 1.4238/1.4239.

This, of course, does not apply to retail customers. Most individual currency speculators will trade using a broker which will typically have a spread marked up to say 3-20 pips (so in our example 1.4237/1.4239 or 1.423/1.425). The broker will give their clients often huge amounts of margin, thereby facilitating clients spending more money on the bid/ask spread. The brokers are not regulated by the U.S. Securities and Exchange Commission (since they do not sell securities), so they are not bound by the same margin limits as stock brokerages. They do not typically charge margin interest, however since currency trades must be settled in 2 days, they will "resettle" open positions (again collecting the bid/ask spread).

Individual currency speculators can work during the day and trade in the evenings, taking advantage of the market's 24 hours long trading day.

Hello!
I'm new here.
Thank you for a very interesting and illuminating post.
I hope this forum will be greater.

Hi, I'm newbie in forex...
My friend told me about GDMFX..
Any other brokers u guys can suggest to me?
I need more info before I start to invest. Thanks

ivan2125 wrote:Hi, I'm newbie in forex...
My friend told me about GDMFX..
Any other brokers u guys can suggest to me?
I need more info before I start to invest. Thanks

I heard bout GDMFX in many forums, seems like forex investment is their expertise.

bency888 wrote:

ivan2125 wrote:Hi, I'm newbie in forex...
My friend told me about GDMFX..
Any other brokers u guys can suggest to me?
I need more info before I start to invest. Thanks

I heard bout GDMFX in many forums, seems like forex investment is their expertise.

I have very little knowledge about forex and since my friend mentioned to me about GDMFX, I thought to give it a try.
Heard they are using MT4 platform, wonder if it is reliable?
Appreciated if you can give me some guides..

ivan2125 wrote:

bency888 wrote:

ivan2125 wrote:Hi, I'm newbie in forex...
My friend told me about GDMFX..
Any other brokers u guys can suggest to me?
I need more info before I start to invest. Thanks

I heard bout GDMFX in many forums, seems like forex investment is their expertise.

I have very little knowledge about forex and since my friend mentioned to me about GDMFX, I thought to give it a try.
Heard they are using MT4 platform, wonder if it is reliable?
Appreciated if you can give me some guides..

MT4 is a well recognized trading platform which widely used by many traders nowadays as well as brokerage companies, banks and financial companies. This is the reason why GDMFX select MT4 as their trading platform.

bency888 wrote:

ivan2125 wrote:

bency888 wrote:

ivan2125 wrote:Hi, I'm newbie in forex...
My friend told me about GDMFX..
Any other brokers u guys can suggest to me?
I need more info before I start to invest. Thanks

I heard bout GDMFX in many forums, seems like forex investment is their expertise.

I have very little knowledge about forex and since my friend mentioned to me about GDMFX, I thought to give it a try.
Heard they are using MT4 platform, wonder if it is reliable?
Appreciated if you can give me some guides..

MT4 is a well recognized trading platform which widely used by many traders nowadays as well as brokerage companies, banks and financial companies. This is the reason why GDMFX select MT4 as their trading platform.

Thanks for the info.. Any other broker to introduce if I want to invest besides GDMFX?

 Hi guys!nice to be here!I just read some guys over here discussing about GDMFX.Actually,I just had joined them a month ago via their minimum deposit of 100usd to try and endeavor forex trading.If you intend to join,see them here [You must be registered and logged in to see this link.]