FOREX ARTICLES

 What is Forex?

Quite simply, it’s the global financial market that allows one to trade currencies.If you think one currency will be stronger versus the other, and you end up correct, then you can make a profit.Once upon a time, before a global pandemic happened, people could actually get on airplanes and travel internationally.If you’ve ever traveled to another country, you usually had to find a currency exchange booth at the airport, and then exchange the money you have in your wallet into the currency of the country you are visiting.

What Is Traded In Forex?

The simple answer is MONEY. Specifically, currencies.Because you’re not buying anything physical, forex trading can be confusing so we’ll use a simple (but imperfect) analogy to help explain.Think of buying a currency as buying a share in a particular country, kinda like buying shares in a company.The price of the currency is usually a direct reflection of the market’s opinion on the current and future health of its respective economies.In forex trading, when you buy, say, the Japanese yen, you are basically buying a “share” in the Japanese economy.

What is forex trading?

Forex trading is the simultaneous buying of one currency and selling of another.Currencies are traded through a “forex broker” or “CFD provider” and are traded in pairs. Currencies are quoted in relation to another currency.For example, the euro and the U.S. dollar (EUR/USD) or the British pound and the Japanese yen (GBP/JPY).When you trade in the forex market, you buy or sell in currency pairs.

Forex Market Size and Liquidity:

The bulk of forex trading takes place on what’s called the “interbank market“.Unlike other financial markets like the New York Stock Exchange (NYSE) or London Stock Exchange (LSE), the forex market has neither a physical location nor a central exchange.The forex market is considered an over-the-counter (OTC) market due to the fact that the entire market is run electronically, within a network of banks and non-bank financial institutions (NBFIs), continuously over a 24-hour period.This means that the FX market is spread all over the globe with no central location.Trades can take place anywhere as long as you have an internet connection!