The word “Forex” is short name for FOReign EXchange, it is also described as “FX”. The forex currency market is one of the world’s largest financial market where one currency can be traded for another. It is a non-stop cash operative marketplace where various currencies are traded off and exchanged through various brokers.
It is estimated that, on average, $4 trillion is traded each day in the forex markets world wide. The great majority of forex trading does not occur on any one centralized entity such as a government but through a number of brokers on the interbank currency market.
The interbank currency market is a 24 hour market that traders gather from anywhere in the world. In principle, the forex market opens up in Asia/Australia and closes down in the USA during which various types of traders such as banks, speculators and brokers put an effort to profit from the trading markets.
Who trades Forex?
- Mega banks, central banks, and other institutional investors
- Currency speculators / Retail traders
- Corporations involved internationally
- Different types of Individual Traders
Currencies traded the most
As of April 2010, following are the most traded currencies by percentage of daily share:
1.United States dollar = 84.9%
2.Euro = 39.1%
3.Japanese yen = 19.0%
4.Pound Sterling = 12.9%
5.Australian dollar = 7.6%
6.Swiss franc = 6.4%
7.Canadian dollar = 5.3%
8.Hong Kong dollar = 2.4%
9.Swedish Krona =2.2%
10.New Zealand = 1.6%