What is Traded on the Forex Market?

Money is the simple answer. FX trading is the buying of one currency at the same time as the selling another currency. As a result currencies are always traded in pairs, for example the GB pound and the US dollar (GBP/USD) or the Euro and the Japanese Yen (EUR/JPY).
The 7 most heavily traded currencies are known as the majors and include; GB pound (GBP), Euro (EUR), US dollar (USD), Canadian dollar (CAD), Japanese Yen (JPY), Swiss Franc (CHF) and the Australian dollar (AUD).

The sheer volume of trading completed in the FX market makes it the most liquid and most efficient market available. Because of the magnitude of the volumes traded, it is virtually impossible for individuals or companies to influence the exchange rate of the major currencies through any form of open market operations. No single individual has the resources required to manipulate pricing through targeted buying or selling on the market. The price of a currency is a direct reflection of what the market thinks about the current and future health of that economic zone.

Forex Basics – What is Forex?

FOREX – the foreign exchange market or currency market or Forex is the market where one currency is traded for another. It is the largestfinancial market in the world, with a volume of over $3 trillion a day; more than three times the aggregate amount of the US Equity and Treasury markets combined.

The Forex market differs to other financial markets because it has no physical location and no central exchange. Instead it operates through a global network of banks, corporations and individuals trading one currency for another. Due to the lack of a physical exchange the Forex market operates on a 24-hour basis, spanning from one timezone to another in the world’s major financial centres.

A large part of the market is made up of currency traders, who speculate on movements in exchange rates, trying to take advantage of even small fluctuations in exchange rates. In addition to traders there are participants in the market who are simply looking to exchange foreign currency for their own currency such as multinational businesses who trade in different countries.

Exchange rate fluctuations are caused by actual monetary flows as well as anticipations on global macroeconomic conditions.The foreign exchange market is often viewed as a ‘pure’ market with very little or no ‘inside information’. Significant news affecting the market is released publicly so, in theory, everyone in the world has access to the same news at the same time. In essence, this translates into a level playing field for anyone wanting to trade Forex from home.

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Next time we’ll cover what is actually traded on the Foreign Exchange Market.

New Look and Forex Basics

On the FXProfessional developments front, our website is receiving a makeover! In the coming weeks the FXProfessional.net website will gaing a new look, we’ll keep you posted with a launch date.

Our aim at FXProfessional is to provide the most comprehensive, but easy to understand Forex Trading Course avasilable. We want to provide our members will all the skills they need to successfully trade Forex and work from home. Our motto is ‘Keep it simple’ and to that end we will be producing a series of posts and articles titled Forex Basics which will give the uninitiated an insight into the world of Forex trading. The posts are designed to give anyone considering learning to trade Forex enough information to make a decison whether it’s for them.

We’ll be starting today with the most basic of basic questions: What is Forex?

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New Zealand Forex Daily Outlook – 30 August 2010

In New Zealand, economic figures are released early – Trade Balance is expected to turn negative – a deficit of 28 million is expected to follow a few months of surplus.

Later in New Zealand, the NBNZ Business Confidence is an important official release that always rocks the kiwi. It fell to 27.9 points last month, hurting the currency. To close the day, Building Consents, are released, and will show how the housing sector is doing.

For more on the New Zealand dollar, read the NZD/USD forecast.