World currencies are exchanged in large because of international trade. For instance, consumers of one country purchase goods of another country. Also, when large companies do business with other global companies. Global investments and monetary diversification are additional reasons that make the FOREX market move.
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WHAT ARE THE MOST COMMONLY TRADED CURRENCIES IN THE FOREX MARKETS?
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The most often traded or ‘liquid’ currencies are those of countries with stable governments, respected central banks, and low inflation. A large number of Foreign Exchange daily transactions involve trading the major currencies, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and the Australian Dollar.
WHAT IS MARGIN?
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The amount of cash deposit required in a clients account in order to open a position or to maintain an open position. Margin is essentially collateral for a position. If the market moves against a customer’s position, the client will be requested to deposit additional funds through a “margin call.”
WHO ARE THE PARTICIPANTS IN THE FOREX MARKET?
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The FOREX market is called an “Interbank” market due to the fact that historically it has been dominated by banks, including central banks, commercial banks, and investment banks. However, the percentage of other market participants is rapidly growing, and now includes large multinational corporations, global money managers, registered dealers, international money brokers, futures and options…
HOW DOES THE FOREX MARKET DIFFER FROM THE STOCK MARKET?
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The FOREX is one of the fastest growing markets in the world because it offers the average investor leverage* unlike most any market, up to 50:1. Since the FOREX is traded globally through a network of banks and financial institutions 24-hours a day from Sunday at 5pm (Eastern Time) through Friday at 4pm (Eastern Time),…
WHAT IS THE MARGIN REQUIREMENT TO MAKE A TRADE?
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The FOREX allows spot currency positions to be leveraged at various amounts depending on the broker – up to 50:1 leverage is common. This means that a 2% margin deposit ($200) allows you to control $10,000 of currency in a 1 Mini lot position in the FOREX market. FOREX trading is conducted on “margin” which…
WHO IS COMPASS FX?
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In 2003, the founder and president of Compass Financial, an experienced, registered futures firm, expanded into the Forex market as Compass FX, an introducing broker for various U.S. and Non-U.S. clearing firms. Our mission was to provide traders with reliable access and support to the foreign exchange market by introducing investors to registered firms trading…