It is essential that you know that the foreign exchange market is very unique for a lot of reasons, mainly because of the sheer size of it. We all know that it is not a tangible market. It is a market that exists virtually, electronically to be precise. It is a market that exists with the help of telephones, the internet and more. It became huge, and it became much more successful, because of the help of the internet. Trading volumes in the forex market are incredibly large. As an example, I would like to point out the trading in foreign exchange markets are usually averaged at $6.6 trillion in one day, and this was in the year 2019, in April. This was according to the bank for international settlements, which is actually owned by 62 central banks, and it is utilised to work in financial and monetary responsibility.
Did you know that the largest trading centres in the world are located in New York, Tokyo, Singapore and London?
I’m pretty sure that you know that the market is open 24 hours a day, five days a week, across most of the major financial centres all over the world. It basically means that it is open for five continuous days, 24 hours, continuously. It means that you can purchase and sell currencies at any time during these five days of the week. The forex market is not exactly a one-stop-shop. Keep in mind that there is a huge range of varieties of many avenues that an investor will go through, in order to execute some forex trades. You can actually go through different dealers, or you can even go through different financial centres which make use of a host of many electronic networks.
If we are looking at it from a historical standpoint, foreign exchange was definitely once a concept for the governments, hedge funds and large multinational corporations. But, in today’s world, trading currencies is very easy; it just takes a click of a button. Accessibility is definitely not an issue, because it is accessible to anyone who has an internet connection and electronic device that can support an internet connection. A lot of investment firms offer chances for people, where they can open up their own accounts, and they can trade the currencies; this is very helpful, because they can do it whenever and wherever they choose.
When you are trading in the forex markets, you are basically purchasing and selling the currencies of multiple countries. But, there is no physical exchange of money, from one hand to another. It is all electronic, as I have mentioned above. This is very contrary to what happens in a foreign exchange kiosk. Tourists make use of these kiosks.