- Forex Fruitful Business :
- Market size and liquidity :
- Trading characteristics :
- Market participants :
- Definitions of currency exchange :
- Speculation :
- Risk Aversion :
- Carry trade :
- Final Wording :
Forex Fruitful Business :
The foreign exchange market (currency, currency or currency market) is a decentralized or non-resident global currency market. This market determines the exchange rate. It covers all aspects of the purchase, sale and exchange of existing or fixed prices. When it comes to trade, it is the largest market in the world, and then the credit market.
The foreign exchange market operates through financial institutions and operates at various levels. Behind the scenes, banks turn to a smaller number of financial companies called “economic entities” that are involved in high currency turnover. Most currency dealers are banks. In view of the above, this market is referred to as the “interbank market” (although some insurance companies and other types of financial companies are also involved). Transactions between investors in the Forex market can be huge and include hundreds of millions of dollars. Due to issues related to the sovereignty associated with the use of two currencies, Forex has little or no regulator that would regulate its operation.
In ancient times, exchange and currencies were important elements of trade that allowed people to buy and sell things, such as food, ceramics, and raw materials. If the Greek currency, due to its size or content, had more gold than the Egyptian currency, the trader could substitute a smaller Greek coin with more Egyptian coins or more material goods. Therefore, most of the coins that are in circulation today at some point in their history have had the value of adherence to a recognized standard, such as silver and gold.
Early modern :
Alex Brown & Sons trade in foreign currency around 1850. He was the main Forex trader in the USA. 1880 Mr dos Espírito Santo de Silva (‘Banco Espírito Santo’) applied for permission to participate in a foreign exchange transaction. 1880 It is believed that at least one source is the beginning of a modern foreign currency: the gold standard started this year. Internet control was much smaller before the First World War: 4.1. Trade with commercial companies. At the beginning of the motivated war, the parties left the zloty monetary system.
Market size and liquidity :
Most transactions do not have one or centrally settled market, and cross-border regulations are very small. OTC currencies (OTC) have several interconnected markets traded in various currency instruments. This means that there is no exchange rate, but there are several different prices (prices), depending on which bank or market maker is sold and where it is. In practice, the rates are quite close to arbitration. Due to the dominance of London in the market, the price of a given currency is usually the market price of London. The most important trade fairs are electronic brokerage services (EBS) and Thomson Reuters transactions. Big banks also offer transaction systems. 2007 In order to find a key market settlement mechanism, a joint venture was launched between the Chicago Mercantile Exchange and Reuters, called market space.
The foreign exchange market is the most liquidated financial market in the world. Traders include government and central banks, commercial banks, other institutional investors and financial institutions, currency speculators, other trading companies and natural persons. April 2010 The average daily turnover of the Triennial Central Bank study, coordinated by the Bank for International Settlements, in April 2010, $ 3.98 trillion dollars. Of this $ 3.98 trillion, $ 1.5 trillion, a cash transaction of $ 5 trillion were the subject of unconditional trading, swaps, and other derivatives.
Trading characteristics :
Most transactions do not have one or centrally settled market, and cross-border regulations are very small. OTC currencies (OTC) have several interconnected markets traded in various currency instruments. This means that there are no stocks, depending on which bank or market maker is sold and where it is. In practice, the rates are quite close to arbitration. Due to the dominance of London in the market, the price of a given currency is usually the market price of London. The most important trade fairs are electronic brokerage services (EBS) and Thomson Reuters transactions. Big banks also offer transaction systems. 2007 The joint venture Chicago Mercantile Exchange and Reuters, called market space, is becoming the main market settlement mechanism.
Market participants :
In contrast to the stock market, the currency market is divided into access levels. The most important of these is the inter bank currency market, which consists of the largest commercial banks and stock exchange investors. On the inter bank market, the differences between buying and selling prices are very high and unknown to players outside the internal circle. The difference between buying and selling prices increases (for example, from 0 to 1 in the stream to 1-2 points for currencies such as EUR) as the access levels decrease. It results from the volume. If an entrepreneur can secure large amounts of transactions in large amounts, he may require a lower margin between buying and selling prices, which is called better distribution. Access levels for currency market participants are determined by the size of the “lines” (amounts they trade). The inter bank market accounts for 51% of all transactions. Therefore, smaller banks, large international corporations (including risk and remuneration for employees in various countries), large hedge funds and even some retailers. According to Galatia Melvin, “pension funds, insurance companies, investment funds, and other institutional investors have played a very important role in the financial markets in general and, above all, in currency markets since 2000.” (2004). he notes: “Hedge funds increased significantly in 2001-2004, as well as their number”. Central banks also participate in the currency market in order to adjust currencies to their economic needs.
Commercial companies :
An important part of the foreign exchange market comes from the financial activities of companies that are looking for foreign currencies to pay for goods or services. Trading companies often make relatively small transactions compared to banks or speculators, and their transactions often have little effect on short-term market rates. Nevertheless, trade flows are an important factor in the long-term direction of the currency exchange rate. Some multinational companies (MNC) may have unpredictable consequences when hedging very large exposures due to exposures that are not widely known to other market participants.
Central bank :
The national central banks play an important role in the currency markets. They try to control the money supply, inflation and/or interest rates, they often have official or unofficial goals for their currencies. They can often use large foreign currency reserves to stabilise the market. Nevertheless, the effectiveness of the central bank’s “speculative stabilisation” is questionable when central banks went bankrupt if they suffered significant losses, as did other entities. There is also no convincing evidence that they actually profit from trading.
Confirmation of MNC foreign currency :
The exchange rate is a daily exchange rate determined by the National Bank of each country. The point is that central banks use the set point and exchange rate to assess the behavior of their currencies. Setting exchange rates reflects the true value of market equilibrium. Banks, traders, and traders use indexing indicators as indicators of the market trend.
Only expectations or rumours about the intervention of the central bank on the currency market may be enough to stabilise the exchange rate. However, in countries with a false currency market system, aggressive interventions can be applied several times a year. Central banks do not always achieve their goals. Combined market resources can easily go to any central bank. Some scenarios of this type were observed from 1992-1993. The European exchange rate mechanism has failed, and more recently in Asia.
Definitions of currency exchange :
International parity conditions: relative purchasing power parity, interest rate parity, Fisher’s internal influence, Fisher’s international influence. Although the aforementioned theories give a logical explanation for currency fluctuations to some extent, these theories remain in stagnation because they are based on obvious assumptions [for example. Free movement of goods, services, and capital] rarely found in the real world.
Payment model: however, this model focuses mainly on goods and services, ignoring the growing role of global capital flows. There was no explanation that the US dollar in 1980 In the mid-1990s, it continued to grow, despite growing current account deficits in the US.
The asset market model: The currency is considered an important structure of the portfolio of investment portfolio assets. The greatest impact on asset prices is the willingness of people to maintain the current amount of foreign currency
The exchange rate is a daily exchange rate determined by the national bank of each country. The fact that central banks use a fixed value and exchange rate to assess the behavior of their currencies. The exchange rate setting reflects the true value of the market equilibrium. Banks, traders, and traders use indicators as indicators of market development.
Over Dispute currency, speculators and their impact on currency devaluation and domestic economies occur. Economists like Milton Friedman argued that speculators ultimately have a stabilising effect on the market and the stabilisation of speculation plays an important role in creating a hedgers market and transferring risk from people who do not want to wear it, those who do it  Other economists such as Joseph Stieglitz, this argument will find more politics and the philosophy of the free market than the economy.
Currency speculation is considered a highly suspicious activity in many countries. [Where?] Although investment in traditional financial instruments such as bonds or shares is often perceived through sharing capital as a positive contribution to economic growth, it is not due to currency speculation. In this respect, it is a gamble that impedes economic policy. Speculation by the border forced Swedish central bank Riksbank, 1992, the interest rate for a few days should be increased to 500% per annum, and later to the devaluation of the crown. Mahathir Mohamad, one of the former Prime Minister of Malaysia, is a well-known advocate of this view. He accused George Soros of other speculators that he devalued the Malaysian bell in 1997.
Risk Aversion :
The negative risk is a type of commercial behaviour that the foreign exchange market shows when a potentially adverse event may affect market conditions. This behaviour occurs when the risky put risky assets in positions, and due to uncertainty, the funds are transferred to less risky assets.
When it comes to the currency market, traders liquidate their positions in various currencies to maintain positions in safe currencies such as the US dollar. Sometimes choosing a “safe” currency is a larger choice based on prevailing moods or economic statistics. One example is the year 2008. Financial crisis. Drops are observed around the world, and the dollar is rising. This happened despite the high level of the US crisis.
￼Currency denomination means the inclusion of a low-interest rate currency in order to acquire another with a higher interest rate. A high-interest margin can be very profitable for the investor, especially if you use a large lever. However, with the entire lever, it is a double sword, and large currency fluctuations can unexpectedly turn transactions into significant losses.
Final Wording :
Forex is just a chance for people who can trade professionally. And now you also have a social trade that does not let you become a professional trader. You can easily choose the winners you want and do what you do, and the percentage of winnings if you win. This is called financial progress.
The next course is designed for social marketing, from birth to key system functions to hidden system pages.