What is Forex?
The forex market is the largest capital market in the world, with an average of $5.3 trillion worth of currency transactions made each trading day. The forex market is open 24 hours a day, five and half days a week. While most large scale currency transactions are conducted with financial institutions located in these major financial centers, forex trading can now also be done in much smaller amounts over the Internet by anyone with adequate funds in a live forex account opened with an online forex broker.
Foreign Exchange – Basics
There are many different players in the FX market. Some trade to make profits, others trade to hedge their risks and others simply need foreign currency to pay for goods and services. The main participants of trading are commercial banks, that’s why currency quotes are set at the interbank market. Apart from large commercial and central banks and multinational companies, there are also many risk-seeking investors who are always ready to engage in different sorts of speculations. Among them are typical retail traders – individuals, who trade on the daily/weekly basis to snatch lots of money. Many of them scrutinize economic and political news, statistical releases and public engagement of influential persons to decipher the future movement of currency’s prices. Others rely on technical indicators without paying any heed to what is happening in the world of finances. You as well are able to become a Forex and join this class of currency entrepreneurs.
The Forex market is decentralized. In other words, there is no physical location where investors go to trade currencies. Forex traders use the internet to check the quotes of various currency pairs from different dealers. Financial centers around the world – London, New York, Tokyo, Hong Kong and Singapore – function as anchors of trading between a wide range of different types of buyers and sellers. To obtain access to interbank currency market you will need to turn to a Forex broker.
This tutorial is created to acquaint you with Forex basics and explain you in simple terms how to trade currencies. This will be your first step in becoming a successful Forex trader. Please check the next pages to further develop your trading skills.
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