What is the Forex Market

The Foreign Exchange Market, or Forex, was established in 1971 when floating exchange rates began to materialize. It is a vast market, one in which currencies of countries are bought and sold. It is also, the largest market in the world, in excess of 1.5 trillion dollars a day.

While this may sound daunting, it is important to remember that once the Forex was closed to small investor, with a high trade minimum. However, over the pst few years it has been opened to the public and now anyone can trade. The word :market” however, is s light misnomer for Forex trading since there is no centralized place where currencies are bought and sold. Most trades are made by telephone or online. What this means is that the market is completely decentralized, and no government can control it, because it is simply too big.

The Forex Group is composed of about 4500 financial organizations that mange the buying and selling the currencies. Most of these are banks, investment firms and commercial companies. They all work 24 hours a day, seven days a week. Banks are especially important since they facilitate the market exchanges.