How Does The Forex Market Operate?


9 Answers

Edward Hodge Profile
Edward Hodge answered
The foreign exchange market (forex, FX, or currency market) is a global, worldwide decentralized over the counter financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.
Taylor Edgar Profile
Taylor Edgar answered
In common with other financial marketplaces, the Forex operates on the basis of bid/ask price. Where the difference lies is in the dual nature of foreign exchange transactions.

Forex rates are special in that they are expressed as "two tier" rates in order to acknowledge the twin nature of foreign exchange transactions. For instance, USD/JPY at 160/15 means a trader is prepared to purchase Japanese Yen at 160 and sell at 160.15. If the trader finds a buyer at this price, then a 15 pip "spread", the difference between the buying and selling price, will have been made on the deal.

The spread between currencies hinges on market conditions and how traders around the globe believe each currency is going to perform and the likely level of volatility in price.

Unlike other exchanges, such as the London Stock Exchange, the Forex market is truly global, no one state or government can regulate the Forex unilaterally. However, this is not to say those participating in the transactions are not regulated.
Anonymous Profile
Anonymous answered
It is a 24 hour market and does not experience a daily closing like a traditional stock market. There is nothing more binding than a credit agreement between the buyer and seller in the forex market, and it works.
Anonymous Profile
Anonymous answered
Download free ebook Currency Trading for Dummies
Giorgos Protonotarios Profile

Forex is simply a huge market responsible for the exchange of world
currencies. Forex operates via the ECN network of banks that means that Forex operates
as a non-centralized network. Like the internet operates. Volumes are huge.. 5
trillions USD only in a single day.

That enormous liquidity in combination with high leverage is creating
some opportunities for trading. But the thing is that you need to know when to
buy and when to sell.. And that is certainly not an easy job. Most traders lose
their funds as they can understand really Forex trading.

Karl Sagan Profile
Karl Sagan answered

You know, trading with closely connected with foreign exchange is very risky. You should think about policy, economy, internal situation etc. People usually can't manage it without additional help. I usually get this help on

Anonymous Profile
Anonymous answered

I hope you enjoy the learning experience. The basic idea of Foreign exchange or Forex is simply exchanging one currency for the next like you would do in a foreign country. I am assuming you knew this and what you are really asking is, what is margin FX trading as done within the interbank mark Starting at everfx

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