Part I. The structure of the FOREX market Pipruit: Well, it looks like I’m starting to understand some things, but one thing is still confusing me. Where is the center of FOREX, the major transaction point, control center or something? Who regulates and coordinates all this stuff? For example, I know that on stock market, the stock exchange is a central point, because all transactions are processed by the exchange itself and in line with strict exchange rules. Does FOREX have something like that? Commander in Pips: You will be surprise with this, but my answer is “No”. FOREX is a over-the-counter market without any central regulator or processing center. It looks more like the global internet. All FOREX transactions are electronic and the market works in 24/5.5 mode. All FOREX participants are linked to each other. Pipruit: Does it mean that I can sell my 50 EUR directly to the Federal Reserve? Commander in Pips: Not quite. The reason is that FOREX is not a single level net, it has some hypothetical grades. I say “hypothetical”, because these grades are not fixed in reality and in any document or anywhere else, but they still exist. The point is that for any transaction on FOREX, some documentary basis is needed. If you, as an individual, want to trade on the FOREX market, you will have to sign a typical agreement with some FOREX broker that provides access to the FOREX market for individuals. This agreement should contain all the rules and definitions for transactions and trading. It may be used in the case of some disagreement or even a court case. Individual just can’t sign such agreements with Central banks, because the latter do not deal with the former due to legislative language. Also most individual can’t do that with any large bank directly, because large banks demand too much start-up assets for trading. But if you’re richer than Mr. W. Buffet, than you possibly can start directly with the largest bank.