Understanding financial markets
Understanding financial markets
1- Understand the world market
What is the global market
In general, financial markets are referred to as the centralized markets of global transactions, in which the types of consumer goods are exchanged in countries around the world, and They are divided into four categories: Commodity, Stock Market, Foreign Exchange, Bond Market. In addition to the oil and precious metals such as gold, silver, the currencies of countries are exchanged by banks, corporations, corporations and individuals in the global markets. In addition, the global market segment provides up-to-date information on all the countries in the world on a range of indicators such as: commodity, money, capital turnover, current account, crude oil production, exports, external debt, trade balance, Gold Stocks, Imports, Remittances, Tourist Input, Population, Employees, Contribution Rate, Retirement Age, Wages, Unemployment Rate, Inflation Rate, Petrol Price, Food Inflation, Currency Reserves, Interest Rate, Inter bank Rate, Bankruptcy, Earnings Security Job, competition rank, mining, GDP, GDP, bank loan rate, personal savings, bank loan rate, confidence factor Trainer
The importance of integrating the global market is that the global monetary system can meet its needs for money and goods in other countries. Therefore, it can be said that the global markets are the markets that meet the needs of the countries. Also important is the importance of other world markets in the type and manner of issuance of bonds and securities by countries. Chinese companies, for example, have the highest share of Australian and New Zealand bonds. The extent of global market transactions is monitored through the IMF and the World Bank. The main sellers of this market are first world countries, including America, Canada, Japan, China and some European countries and major buyers of these third world goods and services including India and Asian and African countries. The amount of money exchanges in a day's financial markets is greater than the total budget of a year in the United States.
World Market Features:
The information is widely circulated in the market and no one can make a profit on it, it is full of buyers and sellers and the market price is very close to the real price.
Money history and money conversion
Money is one of the simplest and at the same time the most important and practical inventions of mankind. For all that has happened, humanity owes this precious commodity. Money is, in the definition in the world-famous books, a piece, object, or thing that one uses to satisfy one's needs or desires. In the distant past commodities such as gold, silver, salt, wheat, etc. have been used as trading instruments, in areas of East Asia and Africa from domestic animals including sheep and cattle on the American continent from animal skins such as cattle. And sheep were also used as money in the countries of China and India along with cow skin, in Iran cereals, etc.
If we take a brief look at the history of money, we can say that the first money used by mankind was coinage that was made of copper, one of the problems that coinage solved was the exchange of commodities, as in commodity exchanges, Commodity costs, transportation, maintenance, and corruption were burdensome to countries and individuals, and these problems led to the exchange of commodities, gradually shifting to copper, silver, and eventually gold. In the 17th, 18th and 19th centuries, the monetary system of the European countries contracted and gradually expanded among most countries in the world. The contract was known as the gold standard. Countries were required to print paper coins that were not of a fixed value and were subject to fluctuations in the value of gold. The United States unilaterally annulled the treaty, which was called Burton Woods, in the time of Richard Nixon, and from then on, all the money used in the world became Fiat money.
Money must be backed by the government and the central banks of the countries in order to have value and exchange credit. Where the central bank of the country of origin guarantees that the money is backed by money, gold, oil or ... and people can use it to buy, sell or provide services. Hence, there is a direct relationship between the country's military, political power and the country's GDP. The more powerful a country is and the higher its GDP, the more direct money it has, and vice versa.
The sequence of steps to convert traditional money into today is as follows:
Wheat trade - Wheat trade - Livestock including cattle and sheep - Role of commodities such as salt and coffee - Swap textiles - Use of metal objects such as swords and knives and ... - Metals (Copper) - Silver and Gold) - Paper Money - Creating a Monetary System Based on the Banking System - Checks - Digital and Encrypted Currencies (Bitcoin and ...
A closer look at the global market and its variants
1- Stock market:
The stock market refers to a set of markets and exchanges that perform the regular activities of buying, selling, and issuing shares of public, private companies, and factories. Based on transactions in this market and on the basis of supply and demand and popularity of corporate stocks among buyers or the lack of acceptance of corporate stocks, these are the factors that make stock valuation, price, and consequently the buying and selling of stocks among traders. Is .
2- Commodity Market:
A market consisting of several stock exchanges that provide worldwide consumer and popular prices for consumer goods. The criteria for pricing goods in this market are determined by the principle of supply and demand.
The commodity market consists of 3 parts:
A. Gold and silver market, metals and building materials ...
B - Food market including: eggs, rice, wheat, coffee, etc.
C - Energy market including: oil, gas, gasoline, coal, etc.
3. Securities Market:
In this market, the securities issued by governments to attract liquidity and government use are traded. In this market, governments usually issue guaranteed profits for securities issued to encourage the public to buy them. The largest securities market in the world is the US securities market.
4- Foreign exchange market (Forex)
Forex is a decentralized foreign exchange market in which all currencies are traded on a floating exchange rate basis. The Forex market is the largest market in the world with a daily trading volume of over $ 5.4 trillion, which is the market that determines exchange rates. This volume of daily trading is so large that the comparison of all the active markets of the world on a daily basis shows a huge difference. To put it simply, when you travel to the US and convert your currency into US currency, you have actually made a Forex deal. And the exchange rate is based on the supply and demand debate, which determines how much you have to pay out of your base money to get $ 100.