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|Subject: Understanding "Forex" Sun Apr 08, 2012 3:45 pm|| |
“Forex” is known as the short form of foreign exchange market which defines the relative values of two or more different currencies.
Foreign exchange market becomes a medium which will support efficiently international business transactions in term of currency conversion. For
example, it allows a firm in Thailand to import high quality steel from Japan
for producing autos. Certainly, this firm needs to pay for their goods by Yen
while its income is counted by Baht, so foreign exchange market permits the firm to carry on its purchase by a currency exchange between Thai Baht and Yen at a certain rate. Another example which is really easy to realize the function of Forex trading is when we are going to go overseas for any purpose. A Vietnamese person may want to spend his vacation in Singapore for a week. After booking airline ticket, hotel and looking at where he wants to go, he will surely concern about the currency Singaporean is using so that his expenditures and purchases such as souvenirs, luxury outfits can be doable and smoother.
For the specific reasons above, Forex broker is totally vital. However, a business man will consider very thoughtfully and carefully for choosing the best Forex broker which benefits him as much as he wants. Some experts in this domain have given many suggestions for this, but in short there
are the most two general ways. The common way of choosing the reliable broker is based on comments and feedbacks from those who have ever used for many times. The choice is also can be made through reading a quick review of the broker to determine the renown and rate. Nevertheless, a more professional trader will have a more professional way to determine the best Forex broker.
Firstly he is required to answer relatively many questions such as what
currency pairs and account size (amount of investment) he needs to trade or
what kinds of spread will be suitable to his business. Those questions demand
excellent experience and knowledge from the decision maker but conversely, they provide information to him to adopt the broker that correctly matches with what he desires. This method allows a safe and trustworthy move in the business progress in term of minimizing exchange risks.
Although there are also many kinds of goods in trading commodity, the majority in foreign exchange market is almost about gold,silver, oil, rice, coffee and gas. And the parties always involved in this market consist of banks, governments, investors and financial institutions.Deutsche Bank is the leader of the top 10 currency traders in the world with 15.64% of the market share followed by Barclay Capital with 10. 75% (May 2011).This field has become the most global liquid financial market over the years.Forex