What is forex?
FOREX (Foreign Exchange market) is an international foreign
exchange market, where money is sold and bought freely. In its present
condition FOREX was launched in the 1970s, when free exchange rates
were introduced, and only the participants of the market determine the
price of one currency against the other proceeding from supply and
demand.As far as the freedom from any external control and free
competition are concerned, FOREX is a perfect market. It is also the
biggest liquid financial market. According to various assessments,
money masses in the market constitute from 1 to 1.5 trillion US dollars a
day. (It is impossible to determine an absolutely exact number because
trading is not centralized on an exchange.) Transactions are conducted
all over the world via telecommunications 24 hours a day from 00:00
GMT on Monday to 10:00 pm GMT on Friday. Practically in every time
zone (that is, in Frankfurt-on-Main, London, New York, Tokyo, Hong
Kong, etc.) there are dealers who will quote currencies.FOREX is a more
objective market, because if some of its participants would like to
change prices, for some manipulative purpose, they would have to
operate with tens of billions dollars. That is why any influence by a
single participants in the market is practically out of the question. The
superior liquidity allows the traders to open and/or close positions
within a few seconds. The time of keeping a position is arbitrary and has
no limits: from several seconds to many years. It depends only on your
trading strategies. Although the daily fluctuations of currencies are
rather insignificant, you may use the credit lines, that are accessible
even to currency speculators with small capitals ($ 1,000 - 5,000), where
the profit may be impressive. (You can learn more about it in the
section: The main principles of trading.)The idea of marginal trading
stems from the fact that in FOREX speculative interests can be satisfied
without a real money supply. This decreases overhead expenses for
transferring money and gives an opportunity to open positions with a
small account in US dollars, buying and selling a lot of other currencies.
