The main volume of exchange transactions in the forex market is conducted to ensure that international trade, investment and implementation of speculation. Speculations made by traders for profit. Currency markets are functioning in different parts of the world and time zones, which allows to make profits in the forex market round the clock.
Every second there are hundreds of deals on buying and selling currencies in FOREX and each seller can always find a buyer. Currencies that are involved in the transaction, usually identified by three-letter code, which is used in the payment system SWIFT, for example:
Exchange course is this proportion in which the currency of one country is exchanged for currency of another country. This balance is constantly changing depending on the time and place of transactions, which enables investors to consistently profit from operations in the forex market. There are a lot of exchange of U.S. dollar. The value of the exchange rate of a currency is also called quotation. Each quotation includes two currencies. They are the base and quote currency. Base currency is usually indicated first of Monetary Instrument, and currency quotes – the second. Currency quotes, in essence, is the price of the base currency, and the base currency in this respect serves as the goods.
For example in the currency pair USD / CHF U.S. Dollar is the base currency and the Swiss franc is the quote currency. In other words, the dollar sold for Swiss francs.
Quotation may be direct and reverse:
Direct(European) quotation – When variable number of national currency is quoted against a fixed amount of foreign currency.
Reverse (American) quotation – a fixed amount of national currency is quoted against the variable number of foreign currency. Examples: AUD / USD, GBP / USD, EUR / USD.
Market currency price is determined by the interaction of buyers and sellers in the forex market.
Foreign exchange market participants are heterogeneous in their composition group. Some buyers or sellers may be part of “commodity” market, making international transactions for the sale of goods. Some may carry out “direct” investment in plant and equipment, or “portfolio” investment, trading with foreign contractors in stocks, bonds and other financial assets, other – to work for “cash” market, engaging in international trade short-term debt instruments. Various investors, hedgers and speculators may appear on the market at any one time, from several minutes to several years. But, regardless of ownership – public or private motives of activity – investment, hedging, speculation, arbitrage, pay for imports, they are part of aggregate demand and supply of certain currencies, and in the process of interaction, they all have an impact on the exchange rate, forcing him to constantly change, which, in turn, allows investors to extract a good profit.
There are two options you can make money on Forex.
OR you can hire professional traders to manage your account and they will trade for you. Find out more about forex investment.