Friday, June 27, 2008

Forex Glossary

Forex, or FX, stands for the foreign exchange market. This is a 24-hour market in which currencies are traded in cash, which is known as a spot market. There is no central, standard trading center, such as, a stock exchange. Instead, trade is conducted "over-the-counter" via an international network of dealers. Until recently, the forex market was confined to larger traders: major, international commercial and investment banks; international corporations; international money brokers; currency traders. When the United States went off the gold standard in 1971, investors immediately recognized new opportunities for making profits.

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Every year, more companies start up that cater to smaller institutions and investors so they may participate in spot forex trading. A prime factor to take into account before participating in the spot market is your temperament. A risk-aversive customer is not suitable for this marketplace. You should consider not only your experience in the investment world, but your objectives, and your capacity to absorb financial losses. Certainly, you should never invest any amount of money you cannot afford to lose.

Below is some of the important forex terms and there definitions that will help you to understand the forex terms more intelligently and use them accordingly.

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