What is the Forex Market?

The currency market, also known as Foreign Exchange (Forex), is the largest financial market in the world, with trading volumes exceeding 4 trillion dollars per day. This market is attended by participants from all over the world, 24 hours a day, via the Internet, through the electronic trading platforms provided by the forex brokers, in order to allow them to buy and sell currencies of the main economies of the world, such As USD, EURO, JPY, GBP, CHF, AUD, CAD, NZD, etc. Likewise, in the forex market, it is possible to negotiate financial derivatives of the CFDs type (Contract for Difference), which replicate the behavior of prices of its underlying assets, among which are Gold, Petroleum, financial indices, bonds, interest rates, and companies that they are listed on the main stock exchanges of the world. To invest in the forex market participants must open an account in a broker or financial intermediary, which will facilitate access to a pool of liquidity providers (Banks, Hedge Funds, and other financial institutions), therefore acting as a counterpart in the buy and sell transactions of currencies (and CFDs). The forex market is an “Over The Counter” or extra stock market since it does not have a physical headquarters that centralizes the transactions of its participants. However, according to the legal domicile of the broker, the participants have the protection of regulatory institutions that supervise the activities of the brokers, in order to guarantee the application of the best trading practices and monitor compliance with the established rules to provide security to the participants and thus contribute to the existence of fair and transparent trading conditions.