looseme   Album Posted Mar.18th, 2021, viewed 191 times

A Quick Guide Into the World of Forex

So let's get started with fx! What is Forex?

Forex is an acronym for FOReign EXchange. The foreign exchange is a currency market where currencies are traded. It represents the largest financial market in the world with daily trading volume exceeding $4 trillion. Just to compare, other financial markets such as equities at $50 billion daily trading volume, and the futures market at $30 billion in daily volume you can begin to realize the size of the animal and more importantly the infinite trading opportunities that lie before you!

The Forex market is a 24 hour market running from Monday morning in Tokyo to Friday evening in New York - non-stop action across the globe! This differs vastly from the other financial markets (like stock markets and commodities exchanges) which open at the beginning of and close at the end of their trading day. They are directly tied to the time zone that they're in which makes them much harder to trade. So for example, for someone living in Australia, if they wanted to trade the US stock market they would have to be up all night to do so due to the time difference. You'll have no such problems in Forex! You can trade at any time, at your convenience. Obviously, the best times to trade are when the biggest financial markets are open - that is the US and European markets - as the biggest players are out to play and liquidity is at its highest.

The players that come into this market vary significantly, its probably the only marketplace where you can find traders with $500 accounts trading against big players (and winning!) such as hedge funds, large banks, corporations and governments!

OK so I get what Forex is, but explain Forex Trading!

Essentially, Forex Trading means exchanging once currency with another, for a period of time, for a profit. In this business (yes it is a business) you're basically speculating that, for a number of reasons, you expect that a currency will go up or down in relation to another currency and you're willing to bet a certain amount of your capital to profit from that idea. For example, you may expect the Euro to go up against the US Dollar, so you buy Euro's and sell US Dollars. Once the Euro actually goes up, you can sell the Euro's, buy US Dollars and take your profit.

Source here