Quick Info:What is Forex ?
Foreign Exchange or as it is reffered to many times : forex, fx or currency exchange market, in term used to describe the trading world of currency. Forex is the largest financial market in the world, with over $1.2 trillion changing hands every single day and you can trade the forex market 24 hours a day. Forex trading is where the currency of one nation is traded for that of another, a simultaneous buying of one currency and selling of another one. We called it a pair.
For example :
Buying Euros(base currency) with US Dollars ( EUR/USD ), with the current rate is 1.23
That means, 1.23 USD DOLLAR must be paid to get 1 EURO.
In the Forex, there are 5 major currencies involve which means they are traded more than any other currency . They are US Dollar(USD), Euro(EUR), British Pound(GBP), Japanese Yen(JPY) , and Swiss Franc(CHF).
The following shows at what times forex trading takes place around the world :-
Time Zone GMT
Tokyo Open 23:00
Tokyo Close 08:00
London Open 07:00
London Close 16:00
New York Open 12:00
New York Close 21:00
The major trading centers today are based on London and New York market, covering approximately 50% of the daily trading volume.This is also the reason why most of the action in the forex market happens within those timeframes ( 7:00 – 21:00 GMT ).
There are several benefits of trading Forex :-
Leverage – Gives the trader the ability to make a large profits and at the same time keep risk capital to a minimum.Forex firms usually offer 200 to 1 leverage( 1 : 200 ), which means $100 dollar margin deposit would enable a trader to buy/sell $20,000 worth currencies.
24 Hours – You can trade from Sunday evening to Friday Afternoon EST.Either you are a full time trader or part-time, you can choose to trade in the morning, noon or night because Forex never sleeps.
Profit in Both Rising and Falling Markets – This is the great advantages of FX trading, you can generate profits in both sides, whether a currency pair is UP or DOWN.A trader can profit by taking LONG position(Buying currency pair at one price and selling it later at a higher price), or a SHORT position( Selling currency pair and buying it back at a lower price).
Tags: forex basic
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