What Is Forex?
Foreign Exchange market can also be referred as Forex, Spot FX, Spot or Retail Forex. Forex is the biggest financial market in the whole world and it is exchanging around $2 trillion each day.
Forex exchange is the simultaneous exchange of one currency to another, in simple words it is the buying and selling or currency with another.
Exchanging of currencies is traded with the help of a Forex broker or a Forex dealer. The currencies are always traded in pairs, example EUR/USD; this means the Euro dollar has been exchanged with U.S. dollar.
The transaction being done in Forex trading is not in physical aspect that is why this can be very confusing. Traders are hoping that the value of their selling currency will go up.
The value of the currencies is reflected from the condition of the country, its economy and general conditions.
The following are the most popular currencies that you will see in the Forex market today: Country Symbol Currency Nickname
1. United States USD Dollar Buck
2. Euro members EUR Euro Fiber
3. Japan JPY Yen Yen
4. Great Britain GBP Pound Cable
5. Switzerland CHF Franc Swissy
6. Canada CAD Dollar Loonie
7. Australia AUD Dollar Aussie
8. New Zealand NZD Dollar Kiwi
As you can notice symbols are always with three letters, the first two letters will identify the country's name and the third letter will identify the country's currency.
Literally, the Forex market follows the sun around the world in transactions. You can choose to trade either at night or in the morning or anytime that you are comfortable in doing the trade.
The following are the time zones of opening and closing of the market:
Time Zone: New York GMT
Tokyo Open 7:00 pm 0:00 Tokyo Close 4:00 am 9:00 London Open 3:00 am 8:00 London Close 12:00 pm 17:00 New York Open 8:00 am 13:00 New York Close 5:00 pm 22:00
Distribution of Forex Turnover:
89% of all the transactions made are done mostly in the United States, followed by Euro at 37% and the third is Japan, at 20%.
Benefits from Trading Foreign Currency:
1. No commissions 2. No middlemen 3. No fixed lot size 4. Low transaction costs 5. This is a 24 hour market 6. No one can corner the Forex market 7. Leverage 8. High Liquidity 9. Free with "demo" accounts, charts, analysis and news 10. With "mini" and "micro" trading accounts
To begin your trading business at home, all you need to have is a personal computer and an Internet connection. With these powerful tools you are connected to the world.
Trading at Forex market is not as costly as before. There is an online trading currency that is called the "micro" account; you can already transact a trading business for around a hundred bucks only. The bigger account is the "mini" account that you can start for higher than a few hundred bucks. The ideal amount for the micro account is at $1,000 and the ideal amount for the mini account is at $10,000.