What Is Forex?

Forex, aka FX trading, or foreign exchange is an international market where one currency is exchanged for another. The forex market is one of the most actively traded markets in the whole world, having an estimated trading volume of $5 trillion.

In forex trading, buyers and sellers meet to transfer or exchange currency among each other at an agreed rate/price. Hence, fx trading is the means by which central banks, companies, and individuals exchange one currency into another.

The enormous majority of currency exchange is undertaken with the intention of earning profit, even as a lot of foreign exchange is done for practical reasons. The price movements of a number of currencies can be extremely volatile with the amount of currency converted each day. It is this volatility that makes forex trading very attractive to traders. As it brings about a greater chance of high profits, it also increases the risk.

There is high liquidity in the forex market, being the largest market in the world, bigger than the stock market. As a result, the foreign exchange market creates a center of attention for many traders, including the experienced and novices.

Forex Market

 The forex market has the highest liquidity in the world, with about $5 trillion every day, as mentioned earlier. In other words, you can buy any currency you want in huge volume, even as the fx market is opened for 24 hours in 5 days per week (Monday to Friday), except on public holidays.

Trading starts with the opening in Europe, Asia, and Australia, to be followed by the USA until the market closes.

The commencement time of forex market in summer is 9:00pm GMT on Sunday, and ends by 9:00pm GMT on Friday. In winter however, it is from 10:00am to 10:00pm accordingly. This means that currencies are traded at all times, day and night. The fx market can always a buyer or seller, compared to other instruments where a downfall of the market would leave their traders with untraceable assets.

Currency Pairs

There are more than a few currencies in the world and each of them has a three letter symbol as follows:

o   USD for American Dollars

o   EUR for Euros

o   CHF for Francs

o   GBP for British Pounds

These currencies are grouped into Major and Minor sorts.

Major Currencies: These are the most powerful economies in the universe and they include New Zealand, Switzerland, Australia, Canada, Euro Zone, UK, Japan, and US. They make forex pairs in addition to other currencies.

When trading forex, you buy and sell currency to each other. The currencies in pairs are known as one against another.

Forex pairs are grouped into three – Exotic pairs, Minor pairs, and Major pairs.

Exotic Pairs: They have one major currency and one minor like USDNOK, EURTRY, and lots more.

Major Pairs: Always involve USD and the most traded types. The seven major pairs are:

o   EURUSD

o   USDJPY

o   GBPUSD

o   USDCAD

o   USDCHF

o   AUDUSD

o    NZDUSD.

Minor Pairs: Currencies are traded between each other in the minor pairs, apart from USD. Pairs can be CHFJPY, EURGBP, and others.

Our top members who join for FREE are earning up to $4000+ per day by using the simple methods we teach them in our course.

Click HERE to Copy Your FREE Forex Signals and Start Profiting.