✔What is the Forex Market✍️ Foreign Exchange Market € Currency Market

what is forex market and forex rate Foreign Exchange Market € Currency Market | Did you ever visit a foreign country? If yes, then when you arrive at an airport, you will find a booth for currency exchange.

May 17, 2022 - 12:45 PM 678 views

In Detail, What is the Forex Market (FX)?

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✔What is the Forex Market✍️ Foreign Exchange Market € Currency Market : Did you ever visit a foreign country? If yes, then when you arrive at an airport, you will find a booth for currency exchange. For example, if an Indian tourist visits the United States of America (USA), then at the airport, you will be asked to exchange Indian rupees (INR) to the US dollar ($). If the Indian tourist is carrying 1000 INR (Indian Rupees), it will be converted to 12.9155 USD in the currency exchange booth, which is equivalent to 1000.15 Indian Rupees. It means that the tourist has already made a profit. While exchanging the currency in the airport, you will find a screen which displays the exchange rates of different countries' currencies. Have you ever found one? Comment below!

If the same tourist carries 500 USD to India, then the tourist is earning a profit of 38,730 Indian Rupees, which is a huge amount. Thanks to the currency exchange, Indians are becoming rich by earning US dollars.

What is the Forex market (FX)? | what is the foreign exchange market ?

The process of exchanging one country’s currency in relation to another country’s currency is referred to as the Forex Market (FX). In simple terms, the Forex market (FX) is also called foreign currency trading or currency exchange market, which allows the global financial market to trade currencies of different countries.

In the real economy, the above airport scene is just an example, but currency exchange is a massive market. Several countries from different geo-graphical locations take part in currency trading. It works 5 days a week, functions 24-hours non-stop and exchanges $6.6 trillion dollars of money in a day.

 What is the FX market exchange rate? what is a foreign exchange market? 

Previously, I have spoken about the exchange rate! What does it mean? It is defined as comparing the currency prices of two different countries at the same time. The changes in the exchange rates of the two different countries' currencies allow you to earn money in the foreign currency market.

However, the Forex market does not have any physical location; it is a global, decentralized market where the currencies of different countries are exchanged.

But, since the currency exchange rates change every second, it can create tension among global traders. However, the basic duty of Forex market traders is to buy and sell currencies of different countries in order to make a profit.

In simple terms, the traders buy the currency of a particular country when it is at a low rate and sell the same currency when it acquires a high rate in the future. This is how the Forex market (FX) runs in the global financial world.

⍟ In comparison to the NYSE and FX,

Have you ever heard of the NYSE? Of course, you might have heard about NYSE on business news channels like Bloomberg, CNBC, or in your local gym saying that NYSE is up today or low today, etc.

The NYSE stands for the New York Stock Exchange Market; it is the world's largest stock exchange, with a daily trading volume of approximately $22.4 billion USD which is a huge amount, but when you compare it with the Forex market, it is a tiny amount. In a day, the Forex market trades $6.6 trillion dollars' worth. Such a big, big, big amount!!!

✰ Forex Market Size

The Forex market’s $6.6 trillion dollar number is collaborative money from the New York Stock Exchange, Tokyo Stock Exchange, London Stock Exchange, and several stock exchanges from different countries. This comprises the entire global foreign exchange market. However, there is a SPOT MARKET that trades a smaller amount (i.e., $2 trillion in a day), which is an integral part of the Forex market and is relevant to Forex traders.

In comparison with the spot market, the trading volume in the retail market is even smaller. In a day, the retail market trades around $200-300 billion USD, contributing to an approximate 3-5% of the trading volume in the FX market.

In detail, you will learn more about the spot market in coming blogs.

✣ Work Schedules in the Foreign Exchange Market

The Forex market (FX) is virtually operated; it means it does not have any offices. Unlike the other stock market companies, the foreign exchange market doesn’t close; it opens for 24 hours a day and 5 days a week and closes only at the weekends.

Once the trading has ended in one particular country, then it shifts to the different financial centres in a different country. However, a particular day starts with the traders waking up in Aukland/Wellington, and then shifts to Sydney, Singapore, Hong Kong, Tokyo, Frankfurt, London, and finally reaches New York prior to the Forex trading starts again in New Zealand.

In the next article, we will talk about: In the Forex market (FX), what is actually traded?

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