Top Rated Forex

What is forex? For most of us may not know much about the meaning of the word. Forex in general can be interpreted as a form of currency trading is one country against another country's currency. What is interesting is the current forex has become a very promising business field. For those of you who want to know more about forex, this article will give a review about the meaning, function, as well as the perpetrators of the forex world which hopefully can be an additional useful information for you.

understanding Forex

Forex is basically a combination of two words in the English language that is "foreign" and "exchange". Foreign can mean "foreign" or "overseas" while the Exchange can be interpreted as an "exchange", in this case that the purpose is the exchange of currencies. And when combined, forex, or foreign exchange can be interpreted as a foreign currency exchange activities.

In one of the Wikipedia page explains that forex in Indonesian also known by several terms that Forex or Foreign Exchange Market. The two terms have the same meaning that a trade involving two currencies of different countries as the object of such trade. Deeper in the process of buying and selling the currency there is the role of the existing major financial markets around the world and lasts for 24 hours a day, respectively.

Functions presence Forex Market

In the process, forex has several major functions are very influential to the perpetrators. The function of forex is divided into three as follows:

# 1. The first function is to facilitate the process of exchange. As we know, in the course of economic activity in everyday situations people sometimes need the funds in the form of another country's currency. Whether it is used in business, travel, shopping or storage.

Currency exchange can be done with a system called Clearing. Well one of the functions of the forex itself is providing these services. For simplicity, examples of such services is the currency exchange service you normally encounter in various places, ranging from banks to money exchange counters in various places.

# 2. The second function is to conduct hedging. Hedging in the Indonesian language is also called hedging. This is a measure commonly performed by a foreign exchange trader as a "guarantee" that the value of the investment fund does not decrease or loss when he sells currency at two different markets. In this case also the role of banks, both domestic banks and foreign banks are also the US as the guarantor of the funds.

# 3. The third function is to conduct arbitration. Arbitration is essentially the difference in interest rates of two different currencies. And the arbitration action is taken for the benefit of the difference of the currency itself. Simply put this action is done by buying a currency that is being undervalued in a country, and sell the currency in the countries where the value of the currency higher.

Performers In Forex Market

In the forex market is certainly there were several parties involved and influence in it or the term as a player in that market. Players forex market can be divided into 6 as follows:

1. Bank

Banks play an important role in the forex market. In this case, the technical term interbank money market (interbank). Interbank itself serves to meet nearly all the needs of the buying and selling as well as currency movements in the field of global business. In performing its functions sometimes the bank will make the process of buying and selling currencies on behalf of its customers. But in large quantities, then the transaction will be carried out on behalf of the bank itself.

Interbank itself is also used by the forex broker to gain an advantage in selling and purchasing forex directly. From there a forex broker can get a little advantage. But this time, the system used interbank electronic system has been developed with a more effective and efficient.

2. Business Needs

Forex trader second is the need of companies or businesses when making payments using foreign currencies. Basically, a business sometimes requires funding in the form of foreign currency when making transactions, but actually not too feel its direct impact on the state of a currency.

Will be different results if talking about companies large corporations. Here the large companies have a big influence and unexpected if they act the release of foreign currency in large amounts. When they let go, the market or speculators can not expect it directly. As a result, the value of a currency can move up or down.

3. Central Bank

Central Bank in this case has a role in controlling the money supply, inflation and is also associated with interest rates. With a very important role, the Central Bank could easily affect the forex market developments.

One of the advantages of the Central Bank of a country is only by making intervention alone is enough to create turmoil on the state of the forex market or foreign exchange. This is due to the concerns with the actions of the Central Bank could raise or lower interest rate currencies. Then a little more continuity of the currency market is determined by the gestures of the Central Bank in the country.

4. Investment Management Company

Generally Investment Management Company who play in the forex market does not make this business as a major source of revenue especially as the pace of speculation. The company is a regular body that manages several funds such as pension funds or donations from foundations. All funds that they use on the forex market sometimes just "play" to get additional revenue for the company.

5. Hedge funds

Next is hedge funds. Hedge funds are a company that is playing in the forex market as speculators. The funds them loose capital is truly maximized in the forex market, there is no other reason for them except to benefit greatly from such activities.

What is surprising is Hedge funds have the ability to develop large even have the ability to affect currency values ​​better than the Central Bank. If it happens to be very difficult to move the value of the currency is good because it is under the control of a koorporasi are oriented on profit.

6. Broker / Broker

The latter is a forex broker. Until recently, the forex broker is still the third most widely sipped profit from the forex market. Basically, a forex broker can be individuals, groups or corporations who have to work together between customers / buyers with sellers of foreign currency.

Their forex broker is very helpful for forex business people or commonly called forex trading. But not infrequently, forex brokerage firms are not responsible for the fake alias instead become the most costly especially for new players in the forex business.

Here was a review of the meaning of what is forex, function, as well as the perpetrator in the forex market. Hope can be a useful additional knowledge. And in conclusion, here is a video about the forex could be an additional reference for you.