Forex - A largest financial market in the world
What is forex?
The foreign exchange market (Forex) is the largest global decentralized or over the counter (OTC) market for the trading of currencies through different applications. Forex is the largest financial market in the world with the highest daily trading volume. This market determines foreign exchange rates for currencies of different countries. Forex includes all aspects of selling, buying, and exchanging currencies at current or determined rates. Forex is the largest market in the world, followed by the credit market.
Who are the main participants?
The main participants in the forex market are the larger international banks. Financial centers around the world function as trading presenters between a range of numerous types of buyers and sellers around the clock, with the exception of weekends. There is no trade on weekends. The foreign exchange market does not set an absolute value of a currency as currencies are always traded in pairs, but instead, it determines its relative value by setting the market price of one currency if paid for with another. For example, US$1 is worth X CAD, or JPY, or EUR, or CHF, etc.
Working and uniqueness of forex trading
How does it work?
The foreign exchange market works through different financial institutions and operates on several levels. Secretly, in the background, large international banks turn to a smaller number of financial firms known as "dealers", who are involved in large quantities of foreign exchange trading. Most of the foreign exchange dealers are banks, so this behind-the-scenes market is sometimes called the "interbank market". Apart from the banks, few insurance companies and other kinds of financial firms are also involved in the trading. Trades between foreign exchange dealers can be very large, involving the trading of hundreds of millions of dollars. Because of the sovereignty issue when involving two currencies, Forex has little (if any) supervisory entity regulating its actions.
Why forex trading is preferable?
The foreign exchange market is different from other stock markets because of its huge trading volume, representing the largest asset class in the world leading to high liquidity. The forex market has geographical dispersion and its trading is a continuous operation, it’s a 24 hours a day except for weekends, i.e., trading from 22:00 GMT on Sunday (Sydney) until 22:00 GMT Friday (New York). There are a variety of factors that affect exchange rates. There is a low margin of relative profit compared with other stock markets of fixed income. Forex market use leverage to boost profit and loss margins and with respect to the size of the account.
Artificial Intelligence (AI) based forex trading strategies
Hybrid Artificial Intelligent system for decisions support in forex
Forex trend is increasing day by day. There are many intelligent systems that are used to make intelligent trading decisions. There is an expert hybrid artificial intelligent (AI) system integrating Neural Networks to give decisions about trading. A neural network is used to predict the forex price in terms of quantitative data, while an expert system is used to handle qualitative factors and to provide forex trading decision suggestions for traders. Experts' knowledge is incorporated in a system and the result of neural networks. This method is very effective in terms of gaining profit in the international market.
Genibux - Forex trading strategy enhancer
Many experts write effective strategies for improving forex trading and generating profits. Genibux is an intelligent system that assists Forex traders to improve their decision-making strategies. The system suggests improvements with justifications for the maximum gain of profit. Genibux is based on Complex Event Processing and it has been implemented with highly logical Genibux Strategy Language (GSL) together with Machine Learning and Artificial intelligence techniques.