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Is Forex a currency exchange or an over-the-counter market? Briefly for those who have never heard of what Forex is.
Forex is an international financial market designed for speculative trading.
It has existed for a long time, in 2016 it turned 40 years old. The reason that laid the foundation for the formation of this financial market was the transition of all countries to free money exchange.
Forex began to perform the function of a regulator of the world economy, ensuring the migration of capital between different states.
Forex is mistakenly credited with the function of a currency exchange. However, it is not. In fact, it is an over-the-counter market on an international scale.
Due to the fact that it is not associated with any exact geographical location, bidders have the opportunity to engage in transactions in any place.
The main function of Forex is the exchange of currencies. But there are people who have turned this exchange into a way to make big profits. The main mechanism is speculative activity.
There is a profit percentage from frequent fluctuations in the exchange rate, helping to sell the currency and earn on the resulting difference.
Participants in this OTC market believe that it has a number of important advantages:
- 1. The possibility of obtaining large incomes. The conclusion of speculative transactions becomes a profitable business. In addition, traders claim that with the help of the exchange they save their savings from inflation.
- 2. The possibility of concluding equally profitable transactions based on the growth and decrease in rates.
- 3. The market is always available in any territory, as it does not have an exact location. This benefit has been discussed above. The only condition necessary for work is the availability of a specially designed computer program and the availability of the Internet.
- 4. Obtaining interesting information and new useful economic knowledge while trading.
- 5. Availability at any time of the day or night. This is explained by the fact that brokerage platforms of all time zones participate in trading. This feature provides convenience, allowing you to conclude transactions when necessary. However, it is worth considering that there are days off, not trading days.