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FOREIGN EXCHANGE-THE FASTEST-GROWING MARKET OF OUR TIME

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FOREIGN EXCHANGE- THE FASTEST-GROWING MARKET OF OUR TIME DIFFERENT WAYS TO TRADE FX ______________________________________________________________ Over the past few years, the FX market has evolved significantly. Many products have been introduced as alternative ways to invest in or trade currencies. Foreign exchange spot is the oldest of these markets and represents the underlying for many of the new derivative products. Options, futures, and forwards are the next oldest, but forwards are generally limited to a nonretail audience. An entire book can be dedicated to the differences between all of the new derivative products, but for the purpose of this book, here are some basic descriptions as well as general advantages and disadvantages (there may be many others that are not included in this list). Spot The FX spot market is the largest market in the world with a daily turnover of over $3 trillion. Quoting Convention   Spot forex is quoted in pairs. If t

FOREIGN EXCHANGE- THE FASTEST-GROWING MARKET OF OUR TIME

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FOREIGN EXCHANGE- THE FASTEST-GROWING MARKET OF OUR TIME COMPARING THE FX MARKET  WITH FUTURES AND EQUITIES _____________________________________________________________ Traditionally FX has not been the most popular market to trade because  access to the foreign exchange market was primarily restricted to hedge  funds, Commodity Trading Advisors who manage large amounts of capital,  major corporations, and institutional investors due to regulation, capital  requirements, and technology. One of the primary reasons why the foreign  exchange market has traditionally been the market of choice for these large  players is because the risk that a trader takes is fully customizable. That is,  one trader could use a hundred times leverage while another may choose  to not be leveraged at all. However, in recent years many firms have opened  up the foreign exchange market to retail traders, providing leveraged trad ing as well as free instantaneous execution platforms, chart

FOREIGN EXCHANGE-THE FASTEST-GROWING MARKET OF OUR TIME

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FOREIGN EXCHANGE- THE FASTEST-GROWING MARKET OF OUR TIME The Foreign exchange market is the generic term for the worldwide institutions that exist to exchange or trade currencies. Foreign exchange is often reffered to as "forex" or "FX". The foreign exchange market is an over-the-counter (OTC) market, which means that there is no central exchange and clearinghouse where orders are matched. FX dealers and market makers around the world are linked to each other around the clock via telephone, computer, and fax, creating one cohesive market. Over the past few years, currencies have become one of the most popular products to trade. No other market can claim a 71 percent surge in volume over a three-year time frame. According to the Triennial Central Bank Survey of the foreign exchange market conducted by the Bank for International Settlements and published in October 2007, daily trading volume hit a record of $3.2 trillion, up from $1.9 trillion in 2