Unlike the New York Stock Exchange, the Forex Trading Market has no physical location or a centralized exchange.The Fx trading market is reffered to as an Over-the-Counter (OTC) or an “interbank” market because the entirety of the maket is run electronically and on bank networks. The market runs on a 24 hour period with no break occuring in trading.
The Forex trading market is by a large distance the largest and most widely traded financial market in the world. Trading is carried out by a very large number of individuals and organizations. Stake holders choose who they want to trade with based on trading conditions, prices and reputation of the trading partner.
The most widely traded currencies:
- USD 62%
- EUR 27%
- GBP 4%
- JPY 3%
- Others 4%
The U.S dollar is the most widely traded currency with almost 62% of the market share, this is followed by the Euro. The “majors” are the most widely traded currencies.
It is of great importance to know that, most forex trade is based entirely on speculation. This means that most of the trading volume is from currency traders that buy and sell based on the day price changes. Speculation is estimated to account for over 91% of the market volume. This means that the Liquidity in the forex market is extremely high. You will always find a buyer or a seller for your currencies and transactions are always instant.