To study FOREX: Currencies market structure.

TO STUDY FOREX: The Market structure of Currencies Online.

To understand the market structure is one of the first options that must bear in mind that one he glides to begin studying FOREX.

In this article we will explain what the market structure FOREX is and will compare it with the structure of other markets to emphasize his differences.

When someone carries on business of buying and selling of currencies, this one business is called Foreign Exchange, which is what properly translates the word FOREX.

FOREX is an extrastock-exchange market because it is not based on a central place or center of operations that controls the whole capital flow that manages in he and all the operations that they request and there carry out the persons who take part on the market.

The market structure FOREX, more than the structure of a place or central office that directs all the operations where it comes together and the whole movement flows, is rather the structure similar to a big network of web that interconnects many participants of the market across the world, by means of phone, computer or fax. This is a market where all the parts are joined with everything.

In this structure there exist points of meeting, to which it is possible to call them creators of the market, who are persons or institutions to which the persons adhere to take part of the advantages of operating in currencies, under the conditions that it needs producing with this one called creator of the market. In the network that is FOREX, there exist thousands of creators of market, like the multiple centers of the textile of the web.

The obvious advantage of this one structure is that, after there is no one it transfers head office of the market and after there is this one produced by many persons from whom they all can get connected, there are no possibilities of establishing a monopoly that controls at his{your} pleasure the negotiation conditions. N ot even the creators of the market can exercise monopoly, since they have next to you many other creators who take part of the market and who make impossible to him to operate the prices to creative only one. In addition to it, if it tries it nevertheless, the users simply have the possibility of changing from creator to other who does not take advantage of his condition. Without relying on that additionally the creators are watched so that they do not alter the operation costs.

On having studied FOREX, we see that this structure emphasizes the FOREX advantages on other markets, since on the centralized markets, this center has the power to modify the conditions of the market to his caprice and expediency. This way, they can control the costs of every operation, instrument by means of which they can prevent also from selling or that or another action from being bought without the users c do nothing on this matter.

 Another important aspect to study FOREX, is that his structure, in contrast to the markets based on the interbank movement of currencies, does not contemplate a hierarchy marked with the participants who interfere in him.

This way, in bought based on the interbank business there are a few participants of major hierarchy, since they enjoy major priority with regard to other participants, these are those a lot of negotiations volume, which have chance of credit, between others. Between all, which more have priority are the users who are banks, since they are those who produce major capital volume on the market FOREX, moving only the coins of the industrialized countries. These banks would have a line to every bank with which they can negotiate and only by means of this one line they might carry out operations. In this case, for other users, like common banks, natural persons, companies, would have to adhere to a bank and submit to his conditions of exchange of currencies.

On having studied FOREX, we realize that there is no similar structure. With the advance of the computers, of Internet and the telecommunications, the previous structure does not exist, practically it has disappeared. Because a special line is already not necessary with this one or that bank to be able to negotiate with him, but the network already communicates and interconnects the entire world, the persons can negotiate his currencies without major stumbles, practically at the same quotation prices for the whole world, including big operators of the market with the small individual users.

This way, both the small clients and the big banks can extract in the same percentage benefits.

On having studied FOREX, bearing in mind his structure, we can notice that this is a market where the small user, the simple natural person, even with a small capital, has good opportunities to achieve benefits without being in so abysmal disadvantages with regard to the big merchants and the operators of the market as there can present themselves on markets as the stock exchanges or the futures market. We hope that this article about the market structure should be useful to them to understand and to study FOREX.

We wish them luck and intelligence in his business.


To return to section Forex, initiating.

---