FOREIGN EXCHANGE MARKET
FOREX IS THE MARKETPLACE WHERE VARIOUS NATIONAL CURRENCIES ARE TRADED. THE FOREX MARKET IS THE LARGEST, MOST LIQUID MARKET IN THE WORLD, WITH TRILLIONS OF DOLLARS CHANGING HANDS EVERY DAY. THEY POST THEIR ORDERS TO BUY AND SELL CURRENCIES ON THE NETWORK SO THEY CAN INTERACT WITH OTHER CURRENCY ORDERS FROM OTHER PARTIES. THE FOREX MARKET IS OPEN 24 HOURS A DAY, FIVE DAYS A WEEK, EXCEPT FOR HOLIDAYS. FOREIGN EXCHANGE MARKETS AVERAGED $5.1 TRILLION PER DAY. FROM A HISTORICAL STANDPOINT, FOREIGN EXCHANGE TRADING WAS LARGELY LIMITED TO GOVERNMENTS, LARGE COMPANIES, AND HEDGE FUNDS. BUT IN TODAY’S WORLD, TRADING CURRENCIES IS AS EASY AS A CLICK OF A MOUSE. ACCESSIBILITY IS NOT AN ISSUE, WHICH MEANS ANYONE CAN DO IT. MANY INVESTMENT FIRMS, BANKS, AND RETAIL FOREX BROKERS OFFER THE CHANCE FOR INDIVIDUALS TO OPEN ACCOUNTS AND TO TRADE CURRENCIES.
HIGH FREQUENCY TRADING
HIGH-FREQUENCY TRADING (HFT) IS AN AUTOMATED TRADING PLATFORM THAT LARGE INVESTMENT BANKS, HEDGE FUNDS, AND INSTITUTIONAL INVESTORS EMPLOY. IT USES POWERFUL COMPUTERS TO TRANSACT A LARGE NUMBER OF ORDERS AT EXTREMELY HIGH SPEEDS. ALGORITHMIC TRADING USES A COMPUTER PROGRAM THAT FOLLOWS A DEFINED SET OF INSTRUCTIONS TO PLACE A TRADE. THE TRADE, IN THEORY, CAN GENERATE PROFITS AT A SPEED AND FREQUENCY THAT IS IMPOSSIBLE FOR A HUMAN TRADER. THESE HIGH-FREQUENCY TRADING PLATFORMS ALLOW TRADERS TO EXECUTE MILLIONS OF ORDERS AND SCAN MULTIPLE MARKETS AND EXCHANGES IN A MATTER OF SECONDS, GIVING INSTITUTIONS THAT USE THE PLATFORMS AN ADVANTAGE IN THE OPEN MARKET. THE SYSTEMS USE COMPLEX ALGORITHMS TO ANALYSE THE MARKETS AND ARE ABLE TO SPOT EMERGING TRENDS IN A FRACTION OF A SECOND.
DIGITAL CURRENCY MARKET
DIGITAL CURRENCY THAT IS SECURED BY CRYPTOGRAPHY, MAKES IT NEARLY IMPOSSIBLE TO COUNTERFEIT OR DOUBLE-SPEND. MANY DIGITAL CURRENCIES ARE DECENTRALIZED NETWORKS BASED ON BLOCKCHAIN TECHNOLOGY KNOWN AS A DISTRIBUTED LEDGER ENFORCED BY A DISPARATE NETWORK OF COMPUTERS. A DEFINING FEATURE OF DIGITAL CURRENCY IS THAT THEY ARE GENERALLY NOT ISSUED BY ANY CENTRAL AUTHORITY, RENDERING THEM THEORETICALLY IMMUNE TO GOVERNMENT INTERFERENCE OR MANIPULATION. THE EMERGENCE OF DIGITAL CROWDFUNDRAISING HAS ALLOWED ANYONE WITH AN INTERNET CONNECTION TO BECOME AN INVESTOR IN INNOVATIVE EARLY-STAGE TECH STARTUPS, WHILE AT THE SAME TIME PROVIDING NEW STARTUP VENTURES WITH MUCH-NEEDED SEED CAPITAL.