Today’s most popular financial market, the forex market, is known as the world’s largest financial market, as well as being defined as a currency exchange. With the operations carried out from the Internet, forex market investors have been trading under much better conditions than other financial markets.
During periods of trade development between countries, problems began to arise in the possibility of conversion into one of the two countries’ money. The Bretton Woods agreement has been signed to solve these problems. Following the agreement signed in 1944, the fixed exchange rate system was adopted. Thanks to the gold-American dollar convertibility, the problem of currency conversion experienced in international trade has also been resolved in this way.
Bretton Woods agreements and the country’s money gold – convertible into the dollar, the country, the currency of the countries have found the dollar equivalents. 1 ounce gold = $ 35 equality has been accepted and the transactions made are made through this equation. Later, as the US and some countries began not to accept this system, the agreement was canceled. The flexible exchange rate system has emerged after this development and is formed in such a way as to be the basis of the forex market. (Click for information on the Bretton Woods Agreement and monetary regimes.)
What is Forex Market?
The shortest definition of Forex market; The market is defined as the market where the instantaneous purchase of the currency of a country and the immediate sale of the currency of another country at the same time yields the gain. The forex market, where commodities and stocks, as well as currency instruments, are traded is known as the most profitable market of our time.
Due to these differences, the forex market, which is different from other financial markets in terms of transaction characteristics, offers the opportunity to obtain maximum profit with minimum risk. It has a trading volume of 5 trillion dollars per day and a market mechanism that makes it possible to obtain high profits even with daily buying and selling transactions.
How to trade in Forex Market?
Forex market trading features, which are different from other financial markets in terms of transaction characteristics, make it possible for investors to make transactions easier, faster, more advantageous and safer than other financial markets. Through forex trading on platforms called traders, instant trading is possible. At the same time, high yields from short-term transactions can be gained thanks to features such as a leverage system.
Even though the logic of the investment process on the Forex market and the logic of the stock market transactions are almost the same, it is different and advantageous that the forex market can perform bi-directional transactions. On the Bourse, an investment instrument is bought at a low price, sold when the price rises, and a profit is generated from the gap between the investments. But in the forex market, investment instruments bring in gains both in value and in depreciation. In other words, while the price of the investment vehicle is rising, the profit is generated by making a transaction in the direction of purchase while decreasing it.
As a trading feature of the Forex market, risks can be limited in a system that differs from the stock market. As a result of a good market watch and analysis, the determined risk factor is transmitted as an order to the market, and when an unexpected price movement is encountered, the transaction is automatically stopped. In this way, there have never been major losses.
Trading transactions through platforms called trader programs have made it easier to invest. Intermediate institutions can offer the relevant price graphs and news by selecting the desired investment tools. Forex market transactions are realized by issuing orders in a simpler way than stock market orders.