What is Forex ? Basics of Forex

FOREX — the foreign exchange market / currency market / Forex is the market where we can trade one currency for another. It is considered in one of the largest markets in the world.
Some of the participants in this market are seeking to exchange a foreign currency for their own currency, for example multinational corporations which pay wages and other expenses in different nations than they sell products in those countries. However, a large part of the Forex market is made up of currency traders, who speculate on movements in currency exchange rates, much like others would speculate on movements of stock prices. These currency traders try to take advantage of even small fluctuations in currency exchange rates.
In the foreign currency exchange market there is little or no 'inside information'. Exchange rate fluctuations are usually caused by actual monetary flows as well as the anticipations on global macroeconomic conditions. Significant news are released publicly so everyone in the world receives the same news at the very same time.
Currencies are traded against one another. Each pair of currency thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the international three-letter code ISO 4217 of the currency in which the price of one unit of XXX currency is expressed. For example, EUR/USD is the price of the euro,we know that, expressed in US dollars, as in 1 euro = 1.2045 dollar.
Unlike stocks and futures exchange, foreign exchange is an interbank, over-the-counter (OTC) market which means there is no single universal exchange for one specific currency pair. The foreign exchange market operates all the time 24 hours per day throughout the week between individuals with Forex brokers, banks with banks, and brokers with banks. If the European session is ended the Asian session or US session will start, hence all world currencies can be continually in trade.The traders can react to news when it breaks, rather than waiting for the market to open, as we can see is the case with most other markets.
According to the BIS triennial report average daily international foreign exchange trading volume was $4.0 trillion in April 2010 .

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