02/07/2022
What is Forex?
The foreign exchange market – also known as forex or the FX market – is the world’s most traded market, with turnover of $5.1 trillion per day. To put this into perspective, the U.S. stock market trades around $257 billion a day; quite a large sum, but only a fraction of what forex trades.
When can currencies be traded?
Forex is traded 24 hours a day, 5 days a week across by banks, institutions and individual traders worldwide. Unlike other financial markets, there is no centralized marketplace for forex, currencies trade over the counter in whatever market is open at that time.
How FX Trading work?
Forex trading is the simultaneous act of buying one currency while selling another. The combination of these two currencies make up what's known as a currency pair. Currencies are always traded in pairs, and each currency in a pair is represented by a unique three-letter code. The first two letters in the code represent the country, and the third letter identifies the currency, such as the code JPY = Japanese Yen. Forex prices are known as rates, and they express the value of one currency in terms of the other. For example, a price or rate in euro-dollar could be quoted as: • EUR/USD = 1.23700 The currency to the left of the slash is the base currency (in this example, the euro), and the currency on the right-hand side is the quote currency (in this example, the US dollar)
When should I buy it?
A trader will open a buy or long position if they believe that the value of a specific base currency will increase.
When should I sell?
A trader would open a sell or short position if they believe that the value of a specific base currency will decrease.
