Forex is an over-the-counter (OTC) marketplace where the currencies of the world are traded. In contrast to other prominent financial centers, forex facilitates trade without a centralized exchange, implementing an exclusively digital platform. Limited barriers of entry, ease of transaction and high market liquidity are its calling cards.
Easily the world's largest market, the average daily traded volume in forex dominates all other global marketplaces. For April 2016, daily volume measured more than US$5 trillion in value, according to BIS. Of that amount, trade of major global currencies such as the United States dollar (USD), euro (EUR), Japanese yen (JPY) and British pound (GBP) accounted for a majority of the trading activity. Institutional investors, retail traders, and central banks and governments satisfy their needs for currency exchange using forex.
Technical analysis and charting are key elements in the active trade of currencies on the forex market. Exchange rate volatilities are studied intensively using Japanese candlestick charts, support and resistance levels, pivot points and more. Various oscillators and momentum indicators are used to predict possible direction and strength of future price movements.
Vast numbers of short-term traders and long-term investors consider forex to be an ideal place to seek opportunity. Profiting from various arbitrage strategies, rollover and short-term scalping operations are common ways an individual can seek to earn money on a daily basis.
Political uncertainty is a key forex market driver, stimulating participation, order flow and volatility. Whether it's a forced regime change or democratic election, politics can quickly sway currency valuations around…
Over the course of human history, certain periods of time have proven especially tumultuous. Racial divides, famine, pandemic and political upheaval all pose unique challenges. In some cases, these events…
Since 1788, every fourth year has brought an election for the Presidency of the United States. During such years, candidates from all walks of life dedicate their time, money and…
Historically, the outbreak of a rapidly spreading and life-threatening virus can quickly send global markets into chaos. Negative economic consequences are typically felt as trade and travel restrictions, as well…
As the world's largest financial market, the forex attracts millions of participants from around the globe on a daily basis. The result is a highly liquid, diverse trading venue that…
Achieving success in the forex can be challenging. Nonetheless, traders from around the globe, both experienced and novice, attempt to do exactly that on a daily basis. Given the above-average…
What Is A Safe Haven Asset? Safe haven assets are investments that investors turn to during times of market volatility and instability, i.e., to "weather the storm." These investments are…
Uncertainty plays a key role in active trading. A breaking news item, surprise economic fundamental, or geopolitical event may send markets reeling at a moment's notice. Whether one is trading…
A collar strategy is a defensive equity play in which an investor seeks to limit the downside in a stock in exchange for forgoing some of the upside potential. This…
For active currency traders, market volatility presents a vast array of opportunities and challenges. Fluctuations in the exchange rates of forex pairs can occur rapidly and seemingly out of nowhere.…
The Sterling ratio is an risk-adjusted investment performance measure. Similar to the Sharpe and Sortino ratios, the Sterling ratio is used to define how efficiently risk capital is being allocated.…
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