Introduction to the Foreign Exchange Market

The rationale behind this post is to break down the inner workings of the foreign exchange market and perhaps provide some enlightenment on the current situation, the forex market in general, the reason why we have and need forex brokers, and how forex brokers make their profit. More importantly, it aims to provide some understanding as to why we, as forex speculators, can and should, despite a very volatile market, continue to trade.

Rationale

Let’s start with a basic explanation of why the forex market came to be, and how it is used by its principal participants. We’ll continue the explanation into the structure of the market, and how it operates. In conclusion, we’ll look at the implications and how this affects speculators.