At the end of the 1970s, after abolishing the fixed rate
system of national currencies as compared to US dollar, the FOREX market
started to be formed (Foreign Exchange operations – operation of exchange of
currencies based on demand and supply). By now the FOREX market has turned into
a global market that is united by a communication network and that is opened on
Monday morning in New Zealand and is closed on Friday evening in the USA.
Depending on the time zone and on the entering of various regional participants
on the market, everyday trade on the forex market is divided into several
trading sessions. Below we mention the main regional sessions on the FOREX
market.
American and Asian sessions are the most aggressive, the
biggest volume of operations falling on the European sessions. New Zealand and
Australian sessions are considered as the most quiet.
The product that is traded at the FOREX market is money (a
product with 100% liquidity) – a product that has both buyers and sellers at
any time on the FOREX market. Twenty-four-hour access to the foreign exchange
markets of Asia, Europe and America make it possible for the trader (a person,
who manages capitals on financial markets) to make transactions at a most
profitable price, while a bank credit with a 1:100 leverage
provided by its
counterpart allows the trader to get high profit with a relatively small
collateral (own means) within a short period of time. The fact that it is very
simple to do the transactions (over the phone or using Internet) makes this
market attractive for business people.
Unlike other markets, the FOREX market is characterized by
the biggest volume of trade, minimum cost of the transactions and the quickest
way of the flow of funds. Liquidity of the forex market has grown up to several
trillions a day. At present, operations on the FOREX market are the main source
of income for many leading banks and other financial institutions in the world.
