The Forex market, established in 1971, was created when floating exchange rates began to materialise. The forex market isn't centralized, like in currency futures or stock markets. trading occurs over computers and telephones at thousands of locations worldwide.
The Forex market, which is the exchange of one currency to another, is the largest market in the world trading up to $ 2 trillion in one single day, to put this number into prospect the New York Stock Exchange trades on average less than 28 billion a day. In dollar volume the market can trade in one week what the New York Stock Exchange trades in one year!
The largest foreign exchange activity is the spot exchange (ie, Immediate) between the US dollar and four other major currencies: British Pound, Japanese Yen, Eurodollar and the Swiss Franc. These four treaties are bought and sold against the US dollar.
Up until 1998 this was the exclusive market of the banks and large institutions that traded treaties among themselves, reaping huge profits. Wonder why the Banks and Insurance companies have the largest buildings downtown? …. currency trading.
In a recent article in the Wall Street Journal, Daimler Chrysler made more money in one quarter trading foreign currency than selling cars. Think of it, if the big companies are doing it, it's definitely the trend to follow. Now thanks to the Internet it's possible for fund managers to be involved in the same trading, at their own level …. With…