The Foreign Exchange, also known as Forex, currency or FX for short, is present anywhere a currency is exchanged for another. This is a worldwide financial market and is currently the biggest in the world. It boasts about $4 trillion dollars of trade every day. This includes trading between central banks, international banks and other large banks for their need; and as of today it still is continually growing. The Forex is different from the stock market in terms of access, here there are several, from the top, the bid and ask price gap widens as you go down the ladder.
The highest level in Forex is for inter-bank trading. They are made up of the largest banks around the globe. They have the smallest gap for the bid and asking price. The next level would be for commercial companies. These commercial companies trade small amounts compared to inter-bank exchange and their trades have little impact on the short term market rates. However, cash flow is still important in the long term. The next level is reserved for central banks. Central banks play a large role in the market as they try to manipulate the inflation, cash supply, etc. They also use the Forex for their reserves. Next level is the Hedge Funds; they control billions in equity and are known to be very aggressive traders. They can sometimes overwhelm central banks. The next level is called Investment Management Funds. This can be compared to mutual funds in the stock market and they basically work in the same manner, they manage large amounts of investment for their customers. Next are Retail Forex Brokers who usually participates indirectly through banks and other brokers. Finally, there are other traders who are not associated with banks, who are usually private companies who offer exchange and payment of foreign currencies.
The Foreign Exchange market is a very large and fast paced world. It would be difficult to keep up with it on your own. That is why today, we can find something called the Forex autotrader. The Forex autotrader in simple definition it is a software, a computer program that enables the user to follow the market trends, ups and downs very easily. Retail dealers have pushed the envelope, the market has become too grand for a single human brain to be able to comprehend everything at a single given time, thus they needed this helping hand. These very sophisticated software can enable a customer to monitor his or her investment in the Foreign Exchange Market twenty four hours a day, seven days a week in the comfort of a desktop computer at home or anywhere with a laptop, as long as there is a web browser and an internet connection. Today, Forex autotrader can even be accessed with a mobile phone. That is convenience.
With technology being in the 5th gear and just keeps going, innovation can be done overnight. The Foreign Exchange Market is an example of this rapid growing innovation as it incorporates Forex autotraders which makes trading far easier today than a few years ago.
Source: http://www.20vn.com/currency-trading/forex-auto-trader-4bf.htm
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.