FOREX is the acronym for the FOReign EXchange market and is the largest financial market in the world with a volume of over $4 trillion a day (yes, $4,000,000,000,000 a day!). It is where one country’s currency is converted to another. It operates through an electronic network of banks, corporations, and individuals trading one currency for another and does not have a physical location nor a central exchange. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another in all the major financial centers.What is Forex Exchange?
Forex Exchange is the simultaneous buying of one currency and selling of another. Currencies do not have a fixed exchange rate and are always fluctuating. They are always traded in pairs. For example, in trading the EUR/USD currency pair, you are simultaneously buying the Euro dollar (EUR) and selling the US dollar (USD).
Which Currencies are Traded?
Below are the most traded currencies with their symbols:
The top four currencies traded are the US Dollar, Euro Dollar, Japanese Yen and British Pound.
Why Trade the Forex?
Trading forex offers several advantages over the stock and futures market. Here are a few reasons why to trade forex:
• Open 24 hours – Trade on your own schedule. The trader can choose what time to trade as the forex market is open 24 hours. This makes forex ideal for those who want to trade part-time.
• Online access - Trade from the comfort of your own home or from anywhere you want. All you need is a computer and an internet connection.
• No commissions – no clearing fees, brokerage fees, government fees, or exchange fees. Forex brokers are instead compensated through the bid-ask spread.
• No middlemen – allows you to trade directly with the market maker responsible for the pricing on a particular currency pair.
• No fixed lot size - Unlike the Futures market, you determine your lot size in spot Forex..
• High liquidity - Forex is extremely liquid. It means that you can enter or exit the market at will in almost any market condition.
• Leverage - A small deposit can control a much larger total contract value. Leverage increases the potential to make higher profits (as well as losses).
• No relation to the stock market - It doesn’t matter if the stock market is going up or down. Forex provides good trading opportunities even in recessions as it only involves the buying and selling of currencies.
6 comments:
Filipinos should try Forex. Although you really need to study its fundamentals as well as honing your skills, it has great advantage compared to other forms of investments.
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Hello Everyone,
Below is a list of the most recommended FOREX brokers:
1. Best Forex Broker
2. eToro - $50 min. deposit.
Here is a list of top forex instruments:
1. ForexTrendy - Recommended Odds Software.
2. EA Builder - Custom Indicators Autotrading.
3. Fast FX Profit - Secret Forex Strategy.
I hope you find these lists helpful.
Hello Everybody,
"Which Forex pair and time frame is best to trade" is the frequently asked question and I want do give you the DEFINITE ANSWER in this comment.
Are you expecting that I am going to say something like EUR/CHF on 5-minute time frame or GBP/USD on weekly...? No, it is not so simple, but SIMPLE ENOUGH we can figure it out!
The "DIFFICULTY" is that markets change over time. If GBP/USD was a well trending currency pair a few years ago, today it is another one.
I actually want to let you know about a SPECIAL TOOL that I use to find the BEST TRENDING PAIRS among all the Forex pairs.
GET THE SOFTWARE: ForexTrendy
The tool watches 34 Forex pairs on all time frames from minute to monthly. This way you pick the best trending pair and time frame at the current time.
LINK FOR SOFTWARE: ForexTrendy
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