Great liquidity, which can enter and exit at any time, irrespective of the amount (in all cases to a few tens of millions of dollars it is no problem). Indeed, the Forex is the largest market in the world and there was a peak of nearly 2000 billion transactions per day on the currency. For example it is 400 times the average daily volume of the Paris Stock Exchange, and 30 times that of the biggest stock market in the world, the NYSE (New York Stock Exchange).
A listing 24 hours on 24 and five days a week The quasi-steady opening of this market allows investors to trade whenever they want, in the evening after dinner when the morning before going to work, everything is possible. It can also react instantly to any event. This is not possible with the stock markets which are closed at night.
The ability to perform operations very speculative with a leverage effect which can go up to 400 times the amount of your cash. Thus, for a deposit of $ 1000 on an account, some brokers offer to invest up to $ 400,000 thanks to the enormous leverage effect. We already imagine the damage that it can cause if you do anything ...
Little value to be monitored. Unlike the stock markets which are hundreds or thousands of titles, Forex proposes only a few dozen different currencies including five or six major operators that closely monitor and which produced the majority of the exchanges.
Transaction costs reduced. To negotiate on the Forex, financial intermediaries do not usually charge commissions, they pay only on the range, buying (the "spread" in the language of Shakespeare). Of the major currency pairs, the spread, or the difference between the bid and the price of sale is 2 to 3 base units (or "pips" in the jargon of brokers). For example, a transaction in the euro / dollar generally costs less than 0.02%! Ten times less than on the actions!
How does the listing of foreign exchange?
It never gives the listing of a single currency for example: what is the value of the dollar or what is the course of the yen? This makes sense only if one compares one currency with another. In this case the currencies are quoted in pairs. So we talk about the listing of the euro against the dollar (EUR / USD) or the pound sterling against the yen (GBP / JPY), for example. It still uses codes to appoint currency in Forex.
It should also be noted that the currency is small quantities and their variations are weak, their listing is displayed on four decimal places. Example of a listing of the pair euro / dollar exchange rate: 1.2055.
In the language of currency (the name given to investors in the foreign exchange market), the smallest price graduation is called a "pip". So when the euro / dollar exchange rate increased from 1.2040 to 1.2043 we say that the change is 3 pips.
Example of a transaction:
Take the case of a course for a pair 1.2000 euro / dollar. If the investor believes that the course of this pair will rise, it will then buy the euro / dollar, which is divided in the following manner: it is buying euros and selling dollars.
This is, however, completely transparent to the user since it plays directly on the pair. It is the broker who realizes that for him its operations in its back office.
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