What is the Forex market?
There has been a great deal of misunderstanding with regards to this question. Let’s start out with what the Forex market is not. The Forex market is not some centralized exchange like people are familiar with the New York Stock Exchange.
Forex transactions are done through what is referred to as the Inter-bank Market. The inter-bank market is a collection of major banks that offer pricing on various currency pairs.
In the past, these banks within the inter-bank market would conduct transactions with each other on behalf of clients like very large corporations. These large corporations would need currency transactions to facilitate commerce. Banks within the inter-bank market would stream prices on the currencies they offered.
The Forex market has evolved in that now this streaming price is made available to the trading public. Until recently banks would not accept trade sizes that were within the range of a retail trader. Times have changed in that banks are now welcoming trade with the retail public. This can be done through an STP Forex Broker or straight through processing Forex broker or a DMA direct market access Forex broker.
It is important to find a Forex broker that aggregates from multiple banks so that the spread is narrow. The spread refers to the difference between the bid and the ask or the buy point and the Sell point.
Hopefully this can provide a little bit of insight and understanding on what the Forex market really is.
To learn more please visit www.clmforex.com
Disclaimer: Trading of foreign exchange contracts, contracts for difference, derivatives and other investment products which are leveraged, can carry a high level of risk. These products may not be suitable for all investors. It is possible to lose more than your initial investment. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. A Product Disclosure Statement (PDS) is available from the company website. Please read and consider the PDS before making any decision to trade Core Liquidity Markets’ products. The risks must be understood prior to trading. Core Liquidity Markets refers to Core Liquidity Markets Pty Ltd. Core Liquidity Markets is an Australian company which is registered with ASIC, ACN 164 994 049. Core Liquidity Markets is an authorized representative of Direct FX Trading Pty Ltd (AFSL) Number 305539, which is the authorizing Licensee and Principal.
