Forex (foreign exchange) or better known as commercial affairs matawang is a type of trade or transactionto trade the eyes of a country against the eyes of the States involving major world markets for 24 hours continuously. The movement of the forex market stems from the new Zealand & Australia market which, continue to the Asian markets japan and Hongkong, to the European market that is Germany to the american market. In the development of its history, central banks belong to countries with foreign foreign currency reserves even the largest can be defeated by the free forex market forces.
Forex has also become the most popular alternative for return on investment as well as the profit that will in jana exceed the average other trades in general (usually the average return is more from 5% – 10% per month, may even reach more than 100% per month for professional traders). Due to such rapid movement, then forex also has a high risk if you do not have sufficient knowledge as well good financial management.
In the process, forex has several major functions that are very influential to the perpetrators. The function of forex is divided into 3 as follows:
- The first function is to simplify the process of currency exchange. As we know, in the daily economic activities of human beings sometimes require funds in the form of currency of other countries. Whether it’s used in business, travel, shopping or storage.The currency exchange can be done with a system called clearing. Well one of the functions of the forex itself is to provide such services. For simplicity, examples of such services are foreign exchange services that you usually meet in various places, ranging from banks to exchange of money in various places.
- The second function is to do hedging. Hedging in Indonesian is also called hedging. This is an act that is usually done by a forex trader as a “guarantee” that the value of investment funds is not reduced or loss when he sells forex in 2 different markets. In this case also play the banks, both domestic banks and foreign banks as us as guarantor funds.
- The third function is to do the arbitration. Arbitration is basically the difference in interest rates of 2 different currencies. And arbitration is an act done to benefit from the difference in the currency itself. This is simply done by buying a currency that is low in value in a country, and selling the currency in a country where the currency is high.