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Forex Trading And The Role Of Regulatory Authorities: Las Vegas Attorney Explanation – Forex is the market for trading one currency to another. The Forex market is also known as foreign exchange or FX. It is the largest financial market in the world and one of the most liquid. Trillions of dollars are exchanged every day.
In addition, The foreign exchange market or Forex is defined as the buying and selling of currencies. These transactions are done online as there is no physical exchange of money. Price reflects a country’s economy compared to other countries.
Forex Trading And The Role Of Regulatory Authorities: Las Vegas Attorney Explanation
The foreign exchange market is a global, uninterrupted market. This market is New York; London It operates in an international network based in major trading centers such as Tokyo and Sydney. Because they have different time zones, it is possible for the market to operate 24 hours a day.
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As shown in the figure above, the major players in the foreign exchange market and their participation percentages are as follows (Khan, 2019).
The interbank market has two levels: 85% of transactions are made and the indirect bank market, which uses brokers.
To be considered a market maker in Forex; A bank or broker must be prepared to quote the price both ways; All other participants in the market must simultaneously pay the price at which they will sell; They are not market makers;
One of the main characteristics of the Forex market is the interbank market, referred to as Over The Counter (OTC). That is, It is not standardized; It has no physical facilities.
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The main functions of the foreign exchange market are to facilitate the transfer of purchases from one country to another. To obtain financing to do international business; This is to provide exchange rate protection to the instruments traded in the market.
Companies specializing in asset management are mainly involved in the foreign exchange market after the banking sector. They are institutional investors; Classified as hedge funds. Institutional investors are, for example, mutual funds; Pension funds and insurance institutions.
From the invention of the Internet to the miraculous invasion of smartphones; Many banking services are rapidly evolving to “click and order”. The term is mainly used in e-commerce businesses. Bank transfer in previous years; Making a payment from one bank to another or even buying a car or a house can take days. Today, everything is just a click away.
As digital life grows, banks are forced to expand their market to more people and businesses. As the saying goes, “It’s life or death.” All of this was a far cry from what traditional banks would have expected before. Today, with the advancement of technology, anyone with access to a smartphone can trade on the stock exchange, which used to be complicated.
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For example, including migrant workers in the megalopolis. It is impossible for a conventional bank to open a savings account, at least for their wages. Fintech companies were created to meet the needs of people trying to use advanced technology and banking services. The name is a combination of “Fin” for “Financial” and “Tech” for “Technology”.
Today, Migrant workers transfer funds to their families in another country; You can do transactions like buying insurance for the first time and investing. All this through a mobile app.
According to Phadke (2020), the leading innovator in digital finance is China. MyBank is a Fintech company founded in 2015 by Ant Financial. This bank offers loans to small businesses in three minutes, supported by massive amounts of data generated by its parent company Alibaba and artificial intelligence resources created through models based on social media.
These days, MyBank serves about 15 million businesses out of 30 registered businesses in China. There are many businesses that are classified as “street businesses”. The motto on their website is “We can understand your needs based on big data and the cloud. Before you come to us, we have calculated the amount of help you need.”
Financial Regulators For Forex Trading
As stated by the Secretaría de Hacienda y Crédito Público (2018), Fintech companies in Mexico today are not limited to banks. Services vary; For example:
Mexico has a regulation for the interaction of these companies. Regulated by the Fintech Regulatory Law according to Secretaría de Hacienda y Crédito Público (2018).
(ITFs) (in English, Financial Technology Institutions); With the aim of providing better legal accuracy to users of financial services through digital platforms.
The sector has established Mexico as a leader in standardization and as a pioneer in the formalization of this sector. Please note that the Mexican government does not guarantee or back clients’ savings or investment in companies in this new sector.”
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March 9 Year 2018. There are approximately 330 companies registered in Fintech in Mexico. 90 of them are related to Fintech Mexico.
The main functions of the foreign exchange market are to facilitate and facilitate the transfer of purchasing power of buyers from one country to another. To finance international business through bank acceptances and to hedge exchange rates through derivative instruments.
The main participants in the foreign exchange market can be divided into direct and indirect. The main participants in the direct market are banking institutions; Companies specializing in asset management. Indirect participants are natural persons who are not financial institutions that have a smaller market share compared to direct participants.
The development of new technologies has forced the banking industry to evolve, leading to new ways of banking. With the establishment of Fintech companies, we can see fewer people needing access to banking services, and countries that have a healthier banking industry, free of the love-affairs caused by corporatization over the years.
Forex Regulation And Key Regulators
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Deliverable(s): A file containing answers to the questions; a mind map; A conclusion and a list of references. The foreign exchange market (also known as the forex, FX, or currency market) is an over-the-counter (OTC) global market that determines exchange rates for currencies around the world. Participants in these markets can buy and sell the relative exchange rates of various currency pairs. able to sell Can be exchanged and traded.
Banks, foreign exchange markets, Forex traders; commercial companies; central banks, investment management companies; hedge funds; Composed of retail forex traders and investors.
Foreign exchange market — Forex; FX or the currency market – also called – is one of the primary financial markets structured to build the developing world economy. This asset class creates the largest financial market in the world in terms of the value of the currency units traded. buying money; selling In addition to being a place for exchange and speculation, the Forex market enables the conversion of currency for international trade settlements and investments.
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Because currencies are always traded in pairs, the “value” of one currency in that pair is relative to the value of the other. It determines how much country A’s currency country B can buy, and vice versa. Establishing these relationships (prices) for global markets is the primary function of the foreign exchange market. It also increases liquidity in all other financial markets, which is key to overall stability.
The value of a country’s currency depends on whether it is “free float” or “fixed float”. Free-floating currencies have relative values determined by independent market forces, such as supply-demand relationships.
A fixed float means that a country’s governing body sets the relative value of its currency against other currencies, often by setting some benchmark. US dollars in free-floating currencies; Examples of fixed-floating currencies include the Japanese yen and the British pound, and the Panamanian balboa and the Saudi riyal.
One of the most unique features of the Forex market is that it can be traded on weekends. It is made up of a global network of financial centers that close only on weekends. As a major forex hub closes down; Another hub in a different part of the world is still open for business. This increases the liquidity available in the financial market, which increases its attractiveness as the most accessible asset class for investors.
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The leverage available in the FX markets is one of the highest that traders and investors can find anywhere. Leverage is the loan given to the investor by their broker. With this loan, investors can increase their trading volume and translate to higher profits. A word of caution is that losses also increase.
For example, Investors in a $1,000 forex market account can trade $100,000 worth of currency with 1% margin. This is called having a 100:1 influence. Their profit or loss will be based on the amount valued at $100,000.
There are three main forex markets: the spot forex market, the forward forex market, and the futures forex market.
Spot Forex Market: The spot market is the instant exchange of currencies on an existing exchange. On the spot. It is a big part of the total Forex.
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