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What's Forex? Quick tips In to the World of Currencies
Why don't we get started! What's Forex?
Forex is an acronym for FOReign EXchange. The foreign currency is really a currencies market where currencies are traded. It represents the biggest financial market in the world with daily trading volume exceeding $4 trillion. Just to compare, other real estate markets such as equities at $50 billion daily trading volume, and also the futures market at $30 billion in daily volume you can begin to realize the size of your pet and more importantly the infinite trading opportunities that lie before you decide to!
The Forex market is a 24 hour market running from Monday morning in Tokyo to Friday evening in Ny - non-stop action across the globe! This differs vastly in the other real estate markets (like stock markets and commodities exchanges) which open at the outset of and close after their trading day. They're directly tied to time zone that they're by which means they are much harder to trade. So for instance, for someone living in Australia, if they wanted to trade the united states stock market they would have to be up through the night to do this because of the time difference. You'll have no such problems in Forex! You are able to trade at any time, anytime you like. Obviously, the best times to trade are when the biggest investing arenas are open - that's the US and European markets - because the biggest players are to play and liquidity reaches its highest.
The players which come into the forex market vary significantly, its probably the only marketplace and you'll discover traders with $500 accounts trading against big players (and winning!) for example hedge funds, large banks, corporations and governments!
So I recieve what Forex is, but explain Forex Trading!
Essentially, Forex currency trading means exchanging once currency with another, for a time period, for a profit. In this business (yes it's a business) you're basically speculating that, for a number of reasons, you anticipate that a currency goes up or down in relation to another currency and you're prepared to bet some your capital to profit from that idea. For instance, you could expect the Euro to go up from the US Dollar, so you buy Euro's then sell US Dollars. When the Euro actually rises, marketing the Euro's, buy $ $ $ $ and take your profit.
Fundamental economic news and political situations play an important role in the fluctuation in value of a currency for just about any given country. I'll be going into much more detail relating to this within the Fundamental vs Technical trading article which you will be posting within this series!
