The Basics of Forex by John Smith

Learn forex market, or foreign exchange market, by understanding what happens. Well, currencies are traditionally traded against each other. Each pair of currencies is noted as XXX/YYY, and the first currency is taken to be the stronger of the pair, and the second is taken to be the weaker. If you want to learn forex market, know that today, it is a huge one, and according to the Wall Street Journal Europe, FX futures volume has increased so rapidly that now it accounts for 7% of the total volume of the foreign exchange market. Today, many developed countries over the world allow trading of FX derivative products. FOREX DERIVATIVE reviewIf you want to learn forex market, you must understand how the foreign exchange market is different from the usual stock market. Well, in a stock market, everyone has access to the same prices. But in the foreign exchange market, there is a division of levels of access. At the highest, there's the inter-bank market, this is made up of the largest investment banking firms. Here, spreads (the difference between bid and ask prices) are sharp and sometimes unavailable, and players not privy to the inner circle do not know about the prices. There are also smaller investment banks, and large multi-national corporations, large hedge funds, and some retail foreign exchange metal market makers. Pension funds, mutual funds, insurance companies, other institutional investors have played important roles in financial markets, generally, and particularly in forex markets, since the beginning of the 21st century. Central banks show their participation in the forex markets too, to support currencies to their current economic needs.There are lots of companies out there, which need foreign exchange for payment of goods and services. They play an instrumental role in the forex markets. They trade comparatively small amounts (compared to banks), however, they do affect the markets, and can sometimes have unpredictable effects. National central banks, too, are important. Inflation, money supply, interest rates, etc. are controlled by them, and sometimes, these banks dip into their foreign exchange reserves with the aim of bringing some much-needed stability to the market. It is a good idea for central banks to buy at a time when the exchange rates are low, and to sell when the rates are high - this way, there is a profit involved. This is how you can learn forex market.There are lots of companies out there, which need foreign exchange for payment of goods and services. They play an instrumental role in the forex markets. They trade comparatively small amounts (compared to banks), however, they do affect the markets, and can sometimes have unpredictable effects. National central banks, too, are important. Inflation, money supply, interest rates, etc. are controlled by them, and sometimes, these banks dip into their foreign exchange reserves with the aim of bringing some much-needed stability to the market. It is a good idea for central banks to buy at a time when the exchange rates are low, and to sell when the rates are high - this way, there is a profit involved. This is how you can learn forex market.