The foreign exchange Market that exist today has been around since the 1970s, when exchange rates and floating currencies were introduced originally. Game players or participants in the market determine the price of a currency against another, always in function of the supply and demand of the currency.
Forex is a unique market because it is free of external controls and that it cannot be manipulated in anyway. It is considered as the largest financial market, with trade reaching between 1 and 1.5 trillion each day. Traders are able to open and close positions very quickly, within a couple of seconds as there are always willing buyers and sellers.
Another well-known characteristic of the Forex money market is the variety of the participants. These different investors have every one of the numbers of the reasons to enter this interesting market, some as longer term hedge investors, while others prefer to use large and impressive lines of credit of two objective for large short term gains. While blue-chip shares are usually most attractive only to the long-term investors, the currency trading prices and daily fluctuations create an environment that attracts investors, with an interesting range of strategies.
Unlike the new york STOCK exchange that is centralized on an exchange, Forex transactions are carried out in all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon. There are dealers who will quote all major currencies of all the possible time zones all over the world, after deciding what currency the investor as to the purchase, the transaction can be done through one of these merchants on-line or off-line. It is quite common practice for investors two to speculate on currency prices by getting a $500 line of credit available to those with capital, and vastly increase their potential gains and losses, also called marginal trading.