What is Forex?

The Foreign exchange market also known as Forex, currency market or FX market is, by far the largest financial market in the world. It includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. Foreign Exchange (FOREX) is the arena where a nation's currency is exchanged for that of another. The average daily trade in the global Forex and related markets is currently over US$ 3 trillion, more than 3 times he aggregate amount of the US Equity and Treasury markets combined. Unlike other financial markets, the Forex market has no physical location and no central exchange (off-exchange).

It operates through a global network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24 hour basis, spanning from one zone to another in all the major financial centers. Traditionally, retail investors only means of gaining access to the foreign exchange market was though banks that transacted large amounts of currencies for commercial and invest purpose. Trading volume has increased rapidly over time, especially after exchange rates were allowed to float freely in 1971.

Today importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long-term holders and hedge funds all use the FOREX market to pay for goods and services, transact in financial assets or to reduce the risk of currency movements by hedging their exposure in other markets.MG Financial, now operating in over 100 countries, serves all manner of clients, comprising speculators and strategic traders. Whether it's day – traders looking for short-term gains, or fund managers wanting to hedge their non-US assets MG's Deal Station allows them to participate in FOREX trading by providing a combination of live quotes, Real-Time charts, and news  and analysis that attar acts traders with an orientation and  technical analysis.

 

The primary purpose of the foreign exchange is to assist international trade and investment,by allowing business to convert one currency to another currency. For example, it permits a US business to import British goods and pay Pound Sterling, even though the business income is in US dollars. It also Supports direct speculation in the value of currencies, and the carry trade, speculation on the change in interest rates in two currencies.
The basic concept of forex trading is similar to those used in equities, bonds, futures, and options markets—the distinction being the product that is traded. In fact, most new forex traders will probably find the transition to forex to be simple and straight forward. The technical indicators and strategies used in other markets can be used in the forex market as well.