Forex marketing&Trading

Unlike stock markets, where investors have access to the same prices, the Forex market is divided in different access levels. What does this mean? According to their financial position, main players have different functions and privileges. Above all levels is the inter-bank market. Here, governments, central banks and important financial institutions are given the opportunity to trade their own currencies. Within this inner circle, the spread, which is the difference between bids and asking prices, is extremely low and convenient and unavailable to players outside this market; such as retail investors, small trading parties and speculators.

As we descend access levels, spreads widen. In order to gain better spreads, participants need to guarantee large numbers of transactions, while investing large amounts of money. The more you have the more you get! The more money that is traded on Forex, the bigger the size of the market line. As we move from a higher level to a lower one, the line gets smaller and the spread higher.

It sounds all pretty complicated which is why Forex should be studied before you enter into it, familiarize yourself with all the terminology and of course find a reputable broker with whom you can explain what your expectations are. High gains usually means higher risk, slower long term gains mean a long term commitment and more gradual increments of growth.

The top inter-bank Forex market accounts for half of all world transactions and the remainder is carried out by the lower levels: investment banks, large multi-national corporations, large hedge funds and retail Forex – metal market makers. Since 1999, the year in which the Euro was created, many banks trade in the Euro with the US dollar losing its position as the centre of market exchange with new growing economies in China and Asia.

The Forex exchange rates or trading rates mainly depend on the supply and demand for any given currency. These important factors change rapidly and constantly, according to the economical and political situation of different countries. Political instability in fact will have a negative impact on the nations’ economy as will a country’s export deficit.

The Forex market reflects a lot on what goes on both politically and economically in the world at any given moment and can often be the precursor in foreseeing the development of future global events. Forex trading is instantaneous and with the advent of the internet it has become accessible to anyone with a computer and a fast internet connection.