International Currency Market

The international currency market was founded in 1971. The main principle of currency exchange on it is to exchange currency for some other. This market is the largest in the world. Its volume is about a trillion dollars a day. To the activity of this market, corporations, commercial and state banks, brokers and other financial organizations are involved.

The financial market Forex is an unusual market. It does not have any single center, the trade is carried out via telephone communication, as well as through computer network terminals, distributed throughout the world.

It is possible to distinguish a set of the main factors influencing the prices of currencies, among them the balancing of payments carried out mutually, the state of the economy, forecasts that are made on the basis of the analysis of graphs, as well as psychological and political factors.

If you are faced with the mechanism by which the international currency market operates, then you know that it is slightly different from the models described in the classic textbooks on macroeconomics. Usually in books they write that foreign exchange demand and supply form an equilibrium course. In reality, all financial markets are in a state of imbalance, all are in a state of constant search for equilibrium, which began around 1971. This was due to the fact that all financial institutions refused from fixed rates, and currencies went to free swimming. Due to the fact that the state withdrew from the exchange rate policy , many professional players arrived at the financial market, which caused the increased fluctuations of the rates. The fact that the international currency market is subject to significant fluctuations causes people to react ambiguously. Professional traders treat it as a source of income, and financial managers of investment funds or corporations view it as a source of risk and uncertainty about future earnings.

The international currency market: what is the attractiveness for investors?

- Liquidity. Operating large amounts of money makes Forex quite liquid. For a single transaction, the cost is many times higher than that of any other market. This feature is the most attractive for any investor, because it provides perfect freedom in opening or closing positions.

- Availability. The ability to conduct round-the-clock trading has an incredible attraction. A market participant does not need to wait, which allows him to respond in time to every adverse event.

- Flexible system for the formation of trades. Many investment managers, when they open a certain position, plan ahead in time for their future activity. The international currency market provides an opportunity to open a position for a predetermined time at the moment when the investor needs it.

- The quality of transactions. Since the market is very mobile, almost every transaction is carried out at a price inherent only to it. So you can avoid the problem of so-called "elusive funds", which is available on the currency exchange, as well as other exchange issues, when the number of funds is limited for simultaneous purchase or sale at a fixed cost.

- Market direction. The movement of currencies has a very definite and identifiable direction, which can be traced in a sufficiently long time period. For each specific currency, there is a pattern of development inherent only to it, and this allows investment managers to obtain ample opportunities for manipulating the financial market.

The Forex company allows speculators to receive income. Only because of this, many commercial banks remain afloat.