Hi
I want to go into FOREX.
My question is : Where exactly money changes hands when a deal is closed ?
Does FOREX have any exchange like in the stock world ?
When I buy a coins couple like USD/EURO where
this purchase take place exactly
who sells me ?
When I stop a deal who buys from me ?
Please expalin in detail
Thanks
EC
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February 26th, 2009 at 8:01 am
Forex is over the counter.
The exchange is done in electronic accounts, you do not have exchange cash, you just need an account with a trader.
February 26th, 2009 at 8:01 am
This is a loaded question. Forex is all electronic and over the counter. No central location. Forex dealers act as sort of a middle man between buyers and sellers.
February 26th, 2009 at 8:01 am
it is working like following:
1. every bank have some different international curency reserves. if you buy from them they can give you , but they have to get those money from relative countries, like us$ from usa, rmb from china. it is the bank where you purchase the money give you the money.
2. how can they get those money? they have two kind of ways to get that money:
one : they use international settlement money ( like us$, euro, etc ) to buy the currency ( rmb, AU$, etc.) they need from relative countries' bank ( people's bank of china, bank from austrilia, etc ); second: they use gold to buy the currency they need.
February 26th, 2009 at 8:01 am
Forex traders trade exclusively "Over the Counter" (OTC), meaning that all deals take place between the buyer and the seller, with no stock-market mediation. This unique aspect allows the private traders, with or without experience, to trade in a market in which companies and corporations actively participate as well. This market's great liquidity allows the trader to withdraw his funds at anytime.
The buying and selling is done by the broker and any + / - is also done from you broker trading account and only profit is transferred to your account.
Regards