Forex market is considered to be a place where people can sell, buy, exchange and speculate on currencies. Forex market mainly comprises of central banks, commercial companies, banks, investment management firms, hedge funds and also retail forex brokers and even individual investors. It is considered to be one of the biggest markets in the world. Even if all the share markets in the world add up, it cannot match the Forex market .In Forex market, people or corporations indulge themselves in trading. It works on somewhat similar lines as the share market. People buy currencies which are less in value and later sell them if the value of a certain currency increases thereby gaining profits.
It is estimated that the forex market performs transactions worth $5 trillion every day. The main currencies traded in this forex market are Dollars and Euros as they have the highest value. The forex market comprises of a global network of computers and best forex broker who are located all across the world. The forex brokers also double up as market makers as they post huge bids which are met by others sometimes. The bidding rates may be some of the most competitive in the world.
The Forex market can be split up into two major levels. These are the interbank and over the counter forex markets. Interbank market is mainly for bakers from large banks who trade currencies on a regular basis for the sake of hedging, balance sheet adjustments and even sometimes for the sake of their clients. Over the counter market on the other hand is the place where individuals and small firms trade with each other. This is usually done through online platforms these days. Some people also hire brokers to do this for them.
The Forex markets open on Monday morning in Asia and close on the Friday afternoon in Newyork. This market operates round the clock and does not even close overnight or has fixed timings unlike other markets such as equities, bonds and commodities. But there are some exceptions. You can see that some emerging market currencies close for a certain time period during the course of a trading day.
The US Dollar makes up for almost 85 percent of all traded currencies. This is followed by Euro and the Japanese Yen These three currencies dominate the Forex market according to reports. Deutsche Bank and Citigroup are the two biggest banks currently in the Forex market. They contribute towards more than 30 percent of the global market share