Forex Trading Education
What is Forex Trading?
Forex, also known as Foreign Exchange, FX or currency trading, is a decentralized global market where the entire world’s currencies trade. The forex market is the largest, most liquid market in the world with an average daily trading volume exceeding $5 trillion. One of the major benefits of trading forex is the opportunity to trade 24 hours a day which makes it highly dynamic in nature, unlike the stock exchange market which is open for a portion of the day. Though Forex trading can be a risky endeavour, arming yourself with the education and strategies can help you become a successful FX trader.
The main ‘Players’ in the Forex Market
The main players can be categorized as consumer, businesses, investors, speculators, commercial banks, investment banks and central banks.
Consumer- it includes all the visitors from countries, tourist and immigrants, etc, they all need to exchange currencies when they travel so they can buy local goods and services. They don’t have the power to set prices but can buy and sell according to the prevailing exchange rate.
Business- those who deal in import and export need to exchange their currency for payments or any services they have rendered.
Investors and speculators- are the ones who buy and sell investments instruments such as shares, bonds bank deposits or real estate.
Commercial banks deal with customers on one hand, and with the Interbank or other banks, on the other hand.
How does Forex trading work?
Trading done in forex requires pairs, in terms of one currency versus another, which means when you purchase one currency you have to sell other currency at the same time. Take for example GBP/USD (sterling vs US dollar) – the fluctuations in the exchange rate between these two are where a trader looks to make their profit. The first currency is called the base which is the one you expect will rise or fall while the second is called quote. When trading currencies, you can speculate on the future direction of the market, by buying or selling depending on whether you think the currency’s value will go up or down. Forex price movements are triggered by currencies either appreciating in value (strengthening) or depreciating in value (weakening).
Why trade Foreign Exchange?
24 Hour Market- The forex market doesn’t have a centralized location; rather, it’s a network of banks, brokers and traders which facilitate trade around the clock during the week. This makes it possible for the traders to participate actively at any time of the day at their comfort. For instance, after the USA market closes, Sydney and Tokyo markets open which is followed by the European market. So pairs that include the Australian dollar or Japanese yen will see some activity in these markets.
Liquidity- The large quantity of each day trades makes it the maximum liquid market in the world. This means under everyday marketplace situation one has the opportunity to purchase and promote currency as one wants to.
The marketplace cannot be cornered- With such a tremendous size of the market, it adds as an advantage for the small players or newcomers so no one can nook them. Even the top-level banks don’t have sufficient pull to control the market, which makes it easy for a rookie to make a move.
Broker as a support system- A broker earns his money off through commission from your trades. Although he’ll be trading your funds the decisions will remain yours. Along with which he would offer real-time quotes, what to buy or sell, etc. So contact www.sibyvarghese.com for they are the best online coaching.
With the following being said it is still a vast topic to understand learn from and so if you’re the keen one who thinks Forex trading is your thing then hurry! Contact www.sibyvarghese.com and get valuable advice and support from one of the best in the industry.