What is Forex Trading?

Indeed, everyone has heard of Forex trading and the Forex market, but hardly everyone knows what it is.

Forex is an international currency market, one of the biggest markets in the world. Forex trading means buying and selling foreign currencies (based on the value of that currency at a particular time). More precisely, it is currency trading. The thing is that since the rates of major currencies are constantly fluctuating, a Forex trader can profit from that, for example, by buying the money at a lower price and later on selling it at a higher price. The main task is to receive the income from operations of purchase and sale of currencies on the Forex market. So, when you know what forex trading is, let’s go ahead and examine the market.

Almost every country in the world is engaged in forex trading markets. The major currencies traded in the market are the U.S. dollar (USD), euro (EUR), Japanese Yen (JPY), Pound (GBP), and Swiss franc (CHF).

The Forex market's leading participants are central banks, commercial banks, and other large financial institutions (they are called market makers). However, private investors like you and me also can participate in this market and extract profits from these operations, of course with smaller amounts – through intermediaries that are brokers.

Unlike promotional and futures exchange markets, in FOREX, there is no single universal exchange for specific currency pair. The foreign exchange market operates 24 hours a day. During the whole week, trading between individuals and Forex brokers, brokers, and banks take place. And in contrast to other markets where traders can react to the news when they show up, instead of waiting for the market opening, as in the case of most other markets.

Each of your bargains in Forex consists of two parts

The entry or opening position (buy or sell a certain amount of currency at the current price) and the closing work, which is the operation inverse to the one you made when you open a position. So, for example, if you’re opening position, it was buying the euro, then closing the position, you are selling the euro at the new price.

The forex market is potentially profitable, but trading in Forex does not exclude a certain percentage of risk, so you should make the head of all forex trading strategies and techniques.

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