FOREX is actually the acronym for Foreign Exchange Market. This market is one of the largest in the world and is the single place where one currency is traded for another.
You should know that some of the participants on this market are just interested in exchanging some foreign currency. But the market is mostly composed of currency traders who speculate the movements that made in exchange rates. Taking into consideration the great amounts of money that are traded on this market we can say that even the slightest speculation is taken seriously. You should know that the exchange rates are closely linked to the monetary flows and the expectations and anticipations of the global macroeconomic conditions.
A very important characteristic of FOREX is that on this market all the currencies are traded against each other. Analyzing the stock exchange and FOREX we will come to the conclusion that there are many differences between these two, however probably the biggest of them all is the fact that FOREX is actually an interbank. Otherwise put, FOREX is an over the counter market that has no single universal exchange for currency pairs. One of the most famous currency pairs on FOREX is the EUR/USD. What this means is that the Euro can be expressed in dollars and the other way around.
Everything is interconnected on the foreign exchange market as the brokers work with banks and the banks work with other banks. The currencies are traded continuously on FOREX. What this means is that when the US and Asian session end, the European session starts.
Something characteristic of the foreign exchange market is the fact that there is a huge volume traded and also there is a very high liquidity. There are many very important investors that can be found on FOREX and some of the most well-known are: Deutsche Bank, UBS AG, Barclays Capital, Citi, Royal Bank of Scotland, JP Morgan, HSBC, Credit Suisse, Goldman Sachs and Morgan Stanley (May 2010).
If you decide to buy Gold Bars in the times of recession you should first ask for a professional’s help.
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