What exactly is forex?Forex is an acronym for FOReign EXchange and is the worldwide currency inter-bank or inter-dealer market that uses a floating exchange rate system. It is the world's largest financial market, with an estimated daily average of more than $1.5 to $2 trillion. Some estimate that it would take the New York Stock Exchange about 2-3 months of trading to equal one day in forex.
Where is the central location of the forex market? For most currency instruments, there is NO central location where trading takes place. This is called the forex "spot market," not to be confused with currency futures or options. The bulk of forex trading takes place between a few hundred large banks that process transactions for large companies and governments. These institutions continually provide exchange rates for each other and for the broader market. The most recent quotation from one of these banks is considered the market's current pricing for that currency. Trading occurs over the internet, by telephone and through computer terminals at hundreds of locations around the globe.
When is the FX market open for trading? Forex is a true global 24-hour marketplace. The trading day begins in Sydney, and moves around the globe as each financial center comes to life. Tokyo follows, then London, and finally New York. Investors can respond in real time to any fluctuations caused by current economic, social and political events.
How can I manage risk?The most common risk management tools in Forex trading are the stop-loss order and the limit order. The stop-loss order directs that a position be automatically liquidated at a certain price in order to guard against dramatic changes against the position. A limit order sets the maximum price that the investor is willing to pay in a transaction, as well as a minimum price to be received in exchange. The foreign exchange marketplace is so liquid that it is easy to execute stop-loss and limit orders.
CFD Market? A CFD is an agreement to exchange the difference between the opening and closing price of the position under the contract on various financial instruments. CFD trading is an effective and convenient speculative instrument for trading shares, indices, futures and commodities.
How does the off-exchange currency market work?The primary market for currencies is the "interbank market" where banks, insurance companies, large corporations and other large financial institutions manage the risks associated with fluctuations in currency rates. The true interbank market is only available to institutions that trade in large quantities and have a very high net worth.
When does forex trading occur?The first session, the Tokyo Session, begins each week on Monday morning in the Asia-Pacific region (Sunday evening in the Americas). Trading continues non-stop, moving into the London Session and on to the New York Session until all markets close on Friday afternoon.
This ability to control a large amount of one currency, in this case the Euro, using a very small percentage of its value is called leverage or gearing. In our example, the leverage is 100:1 because the security deposit controls Euros worth 100 times the amount of the deposit.
Since leverage allows you to control large amounts of currency for a very small amount, it magnifies the percentage amount of your profits and losses. A profit or loss of $1,217.80 on the Euro trans- action is 1% of the full price (with leverage of 1:1) but is 100% of the 1% security deposit. The dollar amount of profits and losses does not change with leverage, however. The profit or loss is $1,217.80 whether the leverage is 100:1 or 25:1 or 1:1.
How is pricing determined for certain currencies?The full range of economic and political conditions impact currency pricing. It is generally held that interest rates, inflation rates and political stability are top among important factors. At times, governments participate in the forex market in order to influence the traded value of their currencies. These and other market factors such as very large orders can cause extreme relative volatility in currency prices. The sheer size of the forex market prevents any single factor from dominating the market for any length of time.
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What are the shares which are trading in IRAN stock exchange?The shares which are trading in Tehran stock exchange are such as: Coal extraction and other mines, Banks, Transportation, Computer, Television or radio, oil, sugar, tire , machinery , chemical production , agriculture and textile
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