Do you know exactly what the Forex is? The Forex or foreign exchange market is a worldwide financial market for trading currencies. Financial centers around the world function as anchors of trading between buyers and sellers all around the clock, except for weekends.

The foreign exchange market helps with international trade and investing by enabling the currency conversion.  A typical transaction goes something like this. A party will purchase a quantity of one currency by paying with a quantity of another currency.

The foreign exchange market is different because:

  • It has a huge trading volume
  • It’s all around the world
  • It operates 24 hours a day except on weekends
  • Many factors affect the exchange rates

The top ten currency traders around the world as of May 2011 are:

  1. Deutsche Bank
  2. Barclays Capital
  3. USB AG
  4. Citi
  5. JP Morgan
  6. HSBC
  7. Royal Bank of Scotland
  8. Credit Suisse
  9. Goldman Sachs
  10. Morgan Stanley

Different from a stock market the foreign exchange market is divided into different levels of access.

  • The Interbank market
  • Banks
  • Commercial companies
  • Central banks
  • Foreign Exchange fixing
  • Hedge funds
  • Investment management firms
  • Retail foreign traders
  • Non bank foreign companies
  • Money transfer

There are many different financial instruments that are used in the Forex, they include:

  • Spot
  • Forward
  • Swap
  • Future
  • Option

In conclusion the foreign exchange market is the most liquid financial market around the world. Traders include in large banks, institutional investors, currency speculators, governments and other financial institutions.  And why are you here you may ask yourself? Well we are one of the world’s largest forex brokers. Here to help you with trading in the foreign exchange market.