Page 5 - Module1_Introduction_to_the_Forex_Environment

Module 1 – Lesson 1 – Introduction to the Forex Environment

With that being said, the Forex market is a nonstop cash market where currencies of nations are
traded. The Foreign Exchange Market (FOREX) is the largest financial market in the world with a daily
turnover of over $5 trillion, more than three times the aggregate amount of the United States Equity
and treasury markets combined. Unlike other financial markets, the Forex market has no physical
location and no central exchange. It operates through an electronic network of banks, corporations
and individuals trading one currency for another.

This lack of a physical exchange enables to Forex market to operate on a 24-hour basis, moving from
one-time zone to the next, across each of the world’s major financial centres every day. The
International Forex Market is open 5 days a week – from Sunday evening till Friday evening. It is
closed over weekends.

A trader’s purpose on the Forex Market is to get profit from the purchasing and selling of foreign
currencies. The exchange rates of all currencies are continuously changing because of the alteration
in demand and supply. Events happening in the sphere of economy, politics and nature may
influence this demand or lack of demand for a certain currency greatly, consequently current prices
of foreign currencies (evaluated for instance in the US dollars) fluctuate towards its higher and lower
values.

Using these fluctuations in accordance with a known principle “by cheaper – sell higher” traders
obtain gains.

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