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What is Forex?
Forex is the abbreviated way of saying foreign exchange. The word "forex" refers to the foreign exchange or
currency market. Additionally, the word has evolved to also describe the financial product that is traded
in this market. When forex is traded, it is actually equivalent in meaning to one currency pair being traded
AGAINST another currency pair. Understanding forex quotes is crucial if you want to begin trading a forex demo
account.
It is important to know the characteristics of the forex market. Most people have an idea about the nature of the stock
market. There are three major exchanges where practically all stock trades are ultimately settled:
the New York Stock Exchange (NYSE), NASDAQ, and American Stock Exchange (AMEX). The forex market does not have a
labeled exchange. It is an over-the-counter market. That means that trades occur between banks, corporations,
and individual traders; however, the trades are not tracked by a central exchange.
Is it regulated? Yes. Unfortunately, brokerages trapped in the equities world choose to tell their clients otherwise.
They say that because forex is not traded through an exchange, it is not regulated. The truth is that all forex
clearing and brokerage firms must be registered (or be in the process of registering) with both
the National Futures Association and the Commodities and Futures Trading Commission . The roles of the NFA and
CFTC can be likened to role the Securities Exchange Commission has with the equities market.
Article Source:
ForexBoards.com
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