Lesson 1. Financial market Forex. Fundamentals.

FOREX is an interbank market that was formed in 1971 when international currency trading moved from fixed exchange rates to floating ones. This market is a set of transactions between market participants who are engaged in foreign exchange operations at established rates and dates. Moreover, the exchange rate is established quite simply: according to the principle of supply and demand, the exchange takes place with the consent of both parties.

In the Forex market, there is no central trading platform where stock transactions are performed, such as on a stock exchange or futures market. Forex is an over-the-counter or interbank market. Transactions are made without intermediaries by phone or through electronic networks.

The Forex market is often called "interbank", because initially in this market dominated by central, commercial and investment banks. But the number of other Forex market participants is growing rapidly, and now they are also transnational corporations, investment managers, registered dealers and international financial brokers, traders engaged in operations with futures and options, and just individuals. Moreover, individuals can trade on the Forex market only through intermediaries - certified market participants (brokers or bank-brokers).

Forex is open 24 hours a day from Monday to Friday. Trading in the Forex market begins every day in Sydney and then continues around the world in the largest financial centers - Tokyo, London and New York. Bidding ends only on weekends. Unlike other financial markets, in the Forex market, bidders can immediately, at any time of the day or night, react to currency fluctuations caused by economic, social or political reasons.

Time of work of the International currency market:

The market starts its work from 00.00 EET Monday and ends its work at 24.00 EET Friday. (EET - Central European time) Ie. it is round the clock! Why?

The fact is that our land is round, and you know it perfectly, and accordingly a day on one side of the globe means night on the other.

And banks in the majority in any part of the world work only in the afternoon on local time, and it turns out that the market never stops working, let's look at the EET:

Pacific (Pacific)

Asian (Asia)

European (Europe)

American (America)

The time when the previous trading session has not yet ended, and the next one has already begun, is of interest to speculators, as significant exchange rate fluctuations can occur. The concept of "thin market" is associated with the time when there are few participants in the market. "Thin Market" is the lunch time of each trading session, holidays.

It is also common to divide the trading sessions by its activity. The quietest session is the Pacific (Pacific), the Middle on the activity is considered to be European (Europe) and Asian (Asia). Well, the most active or still it is called aggressive consider American (America). It is the largest number of transactions and the fluctuations of the exchange rate are very large. For those who are just beginning to study the foreign exchange market, the American session is not the most suitable time for transactions.