There are no physical forex exchanges in the world. Instead, you buy and sell forex products in an Over the Counter (OTC) market, where contracts are made directly through telephone lines or an electronic system.
Because there are no physical exchanges, the trading can be done very flexible timetable wise. This means the forex market is a 24-hour market.
The FX trading day begins from Sydney, then moves to Europe and finally Americas.
Trading Without Forex Exchanges
Large banks and financial institutions have traditionally dominated the trading on forex markets. Traditionally, if a customer wanted to deal the forex, he had to get an account with one of the banks with forex operations.
Then, actual trades were placed with the customer dealer, who quoted rates given by the bank’s interbank dealers that handle liquidity and trading balance for forex operations.
However, the introduction of Internet-based FX trading has dramatically increased the number of individuals who trade forex.
The increase is due to easier access to forex analysis and trading platforms. Moreover, if the customer chooses to trade forex Contracts for Difference (CFD), the margin requirements (with CFD mini accounts) are much less than for the original forex markets.
The downside on using CFDs is that, in many cases, the marketmaker for forex on the CFD market is the brokerage in question.
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