The currency market is most commonly called today as a foreign exchange market or a shortened forex form. Apart from the name used to overcome this industry, basically the same market where there is a market to trade currencies. The growth of the Forex market was initiated, especially in the 1970s with a floating exchange rate attack in countries around the world. Since the beginning of the currency market, there has been almost continuous growth and expansion including new countries and new currencies.
The parties involved in the currency market range from an individual sitting in front of their personal computer to the main financial institutions or hundreds of brokers trained in the field of currency market trade. There is also a great player that must be considered. The most traded and reliable currency includes the US dollar, Euro, Japan yet, Pound Sterling, Australian Dollar, and Swiss francs. This currency is the culmination of the forex market because the exchange rate and market fluctuations tend to be the most stable in this highly valued currency.
There are many components that contribute to the level of currency trading involving political, economic and psychological factors. Politically, a more stable country is the less volatile the value of their currency and thus economically stable. Economic stability of a country and its currency is very important to determine which currency pairs are your best interest when entering the Forex market.
The psychological aspects of the currency market include such phenomena such as market psychology where traders are predicted to continue in a certain way by way. Also, traders depend on market trends that can be felt by tools known as market indicators or graphics. These indicators are best used to determine what type of trend flow and whether it will fall or rise.
The types of transactions used in currency markets include forex spot transactions, forward forward transactions, and forex swap transactions for several. There are advantages and disadvantages related to each and each type of transaction depends on the number of available currencies, the risks caused for business or individual, or the ability to wait a long period of time. That is why forex trading is very popular throughout the world, with various currency traders.