Widely known as FX or Forex, foreign exchange is a currency market where buying and selling of currencies is done. Forex is the world’s biggest trade market and has large number of trader and brokers involved in it. Apart from being a 24/7 market, Forex has a large number of benefits that makes it a home for traders across the world.
Forex or foreign exchanges is different and much more advantageous from other trade markets like stock market or any other exchange market.
What make Forex unique are its benefits and the amount of money that is being traded on daily bases. With more 2-3 trillions of dollars on trade, Forex includes trading with currency all over the world divided into ‘Majors’ and ‘Minors’. EURO, Japanese yen, US dollar and British pound are few of the examples of ‘Majors’. These ‘Majors’ and ‘Minors’ are dealt in pairs when trading in Forex. Thus, the most common pairs are GBP/USD (British pound/ US dollar), USD/JPY (US dollar/Japanese Yen) and EURUSD (Euro/ US Dollar).
Unlike any other exchange market, Forex is an Interbank/Interdealer market where the trading is via a broker or a bank. Forex is also known as over the counter (OTC) market, as it has no central building or land based office and all the trading is done on phone or internet.
In Forex, rise and fall of currencies or pair directly dependent on the political, economical or social changes of particular country, also such fluctuation can occur due to change in quotes or policies of banks. This instability of currencies makes Forex a serious matter and that is many Forex education or Forex trading courses are found on net or provided by Forex companies.
Thus, with so much on line it is important to deal every Forex buying and selling process with a complete knowledge and idea about the current situation of market, the trend of ups and downs and so on.
Some of the most common terms used in Forex are pips, spread and bid. While Forex may sound serious and risky it also has many risk management tools that makes it easy and comfortable zone for any new comer. Tools like stop loss or demo account are every new comer’s road to learning safe and secure trading, while demo account is a fake account which allows a new trader to trade real but with unreal account and investment. The purpose of such account is to trade while learning stop loss helps to put a stop on a trader’s investment when in loss, similarly there are many technical tools which can offer great assistance in Forex dealings.
When beginning with Forex it is important to keep in mind that key to successful trading is patience and discipline. Forex is a not a place for overconfident or confused people who fid it difficult to handle a win or a loss. With the immense leverage and liquidity factor making bid and ask flexible Forex can make people with no strategy and plans lose big time.