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What is Forex How it Works

What is Forex How it Works 1. What is Forex? Forex, FX (Forex) - stands for 'foreign exchange' is the exchange of currency pairs. For example, you can buy euros by selling US dollars, this is a common Forex transaction, consisting of two simultaneous operations. In every transaction involving two currencies, that's where the notion of "currency pair" comes from. There are many different currency pairs: EUR/USD, GBP/USD, USD/JPY, etc. The exchange rate is shown as a quote for example, EUR/USD = 1.3000.

The currency to the left of the feature is the base currency (in our example - EUR), while the currency to the right of the feature is called the quote currency or counter currency (in our example - USD). Buying and selling is always an amount of the base currency. The quote shows how many units of the base currency are worth in the quote currency. Like, 1 EUR = 1.3000 USD, that is to say, 1 EUR you can buy 1.3000 USD. what is forex and how does it work

When you buy/sell one currency against another you are opening a long/short position on this currency pair. For example, if you expect growth in the euro against the US dollar, you open a long position on EUR/USD (buy a pair of EUR/USD - buy Euros, sell US dollars). After some time has passed and the EUR/USD rate has gone up, you close the position/deal and make a profit. The size of the profit depends on how the currency pair rose during this period, as well as the size of your position.

Traders who expect a currency pair's growth rate and trade when the price goes up are called "bulls" and those who wait for the exchange rate to fall and trade when the price goes down are called "bears". forex trading without capital

Who trades in the Forex market?

In the Forex market there are many different players. Some of them transact to make a profit, others "hedging" (insurance) exchange rate risk, and some need foreign currency just to pay foreign contractors.

According to data from the Bank for International Settlements (BIS), daily turnover in the FX market in 2010 reached $4 trillion, an increase of 20% compared to 2007.

The forex market is decentralized. In other words, there is no single physical platform where investors will come to make transactions for buying and selling currencies. Forex traders can use the internet to get currency quotes from different dealers. Global financial centers act as "anchors" between a large number of disparate buyers and sellers. The main bidders are commercial banks, so forex quotes are based on the interbank market. Access to the interbank market is accessible via Forex-Broker

Why should I become a Forex trader?

You will be able to get a very large income compared to the initial deposit.

To start trading does not require a large amount of money, just 5 USD.

For financial freedom because you will have your own business.

You can manage your time, transact at a time that is convenient for you.

You will gain extensive knowledge and experience in the financial sector.

When is the Forex market open?

Trading in the FX market is 24 hours a day, 5 days a week, Monday to Friday. During this time interval can be divided into trading sessions or periods during which different regions of the world stock market are open. Usually the trading volume on Forex is larger by the time it crosses this session.

You can transact at any time during the working day. You can open trading positions for several hours or less (transactions within one day), and for several days (long-term trades).

Individual traders usually transact in the FX market through brokerage firms that give them access to the interbank market, where transactions occur. It takes you just a few minutes to open an account and start trading. To feel confident, you can practice trading on a virtual demo account.

With a few clicks you can open an order for the buy/sell of the currency pair you want. When you decide to stop trading, your broker will close your position on the interbank market and assign your profit/loss to your trading account, all these operations take only a few seconds.