What is forex trading and how does it work

What is forex trading and how does it work

The main features of the Forex market are:
 Functionality
The foreign exchange market transfers purchasing power between different countries. When
making trade transactions, the partners convert the income into a national currency. With
increasing purchasing power of one country, there is a decrease in the purchasing power of
another country. The Forex market also works for the purpose of lending to international trade
and helps to avoid the plight of the exchange rate. Forex provides borrowed funds for financing
and promotes commodity exchange between countries.


 Geography
A feature of the Forex market is also its coverage of the entire globe. There is no state that is not
included in the international network - this makes Forex such a popular place for earning. There
is always room for new players.
The geographical component of Forex helps novice players to realize the scale and volume of the
foreign exchange market, which by its size has no equal - that's what makes it an incredibly
powerful tool for investors.

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 List of participants
The Forex market consists of 2 main parts: the interbank market of currency transactions
(wholesale, domestic market) and the customer (retail market). These parts, in turn, include
about five different types of participants:
Private investors, investment and commercial companies. This includes exporters, importers,
tourists, as well as other portfolio investors who use the Forex market to simplify investment.
Non-bank and bank currency exchange dealers who sell at Ask price and buy at the Bid price.
Arbitrators and speculators, earning exclusively for themselves.
Brokers. They are intermediaries in making transactions, but they are not partners in currency
transactions.