subject: All Abput Forex [print this page] What is forex? Forex is short for 'foreign exchange,' the practice of trading currency pairs. Foreign exchange trading is also known as currency trading. Foreign exchange is the conversion of one currency to another. It is what drives international trade and investment because it presents businesses worldwide the opportunity to convert their currency into another.
To know more about what is forex, they should know about foreign exchange rate. Foreign exchange rate is that at which one currency can be converted into another. Currencies can be exchanged for another because all currencies have values relative to the other. Foreign exchange rates never remain the same. These rates constantly fluctuate due to several economic factors.
To further know what is forex, one should be familiar with the foreign exchange market. It is where foreign exchange trading occurs. The foreign exchange market is considered the biggest cash market in the world. Its operations are said to be worth an estimated $3.2 million. The amount is not surprising, because the market runs in a 24-hour cycle. Traders all over the world carry out transactions on their own schedules because the market is open around the clock; there is no bell to signal the end or beginning of a foreign exchange transaction. It is only closed during the weekends.
Another thing about what is forex is that its market is quite different from other markets. Foreign exchange is not regulated, which is not the case for the likes of the stock markets. Foreign exchange is also not governed by a central body; it does not operate with the help of clearing houses or arbitration committees. Dissimilar to an equity market, the foreign exchange market has no restriction on short selling regardless of the movements of the market. These are things people should know about what is forex.
