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Economists View: FOREX Explained – ‘What is Forex?’

FOREX is short for “foreign exchange”. When we discuss the FOREX market we are usually referring to the purchase or sale of a currency against sale or purchase of another currency. The largest and most active market in the world is in fact the foreign exchange market. Since the market remains open for 24hrs (never closes, one market closes while the other opens,) it also features some of the biggest daily money moves.

Any type of financial instrument that is used to make payments between countries is considered foreign exchange. The list of instruments includes electronic transactions, paper currency, checks, and signed, written orders called bills of exchange. Large-scale currency trading, with minimums of $1 million, is also considered foreign exchange and can be handled as spot price transactions, forward contract transactions, or swap contracts.

You will find countless online FOREX tools that try to capture the demand for ‘quick and easy money’. Online FOREX traders are essentially consumers with money to spare who wish the seek the thrill of foreign exchange markets over their usual day trading.

When one speaks of a forex profit or loss, he is talking about the increased or decreased value of an investment caused solely by appreciation or depreciation of competing currency.

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