In this post we will highlight one of the terms that we hear regularly, especially on the Internet, which is the term forex market, FOREX, or the global currency market.
What is the forex or foreign exchange market?
Forex or FOREX is an abbreviation for Foreign Exchange Market, which means foreign exchange market, and is also referred to by the acronym FX. Forex is one of the most famous financial markets and a huge financial market in which countries “currencies are traded among millions of investors, banks and mutual funds for various purposes, the most important of which is to benefit from changes in exchange rates. Currencies and profits from buying and selling. Forex trading is booming thanks to the technological development and diffusion of the Internet and modern communication. The forex market is a decentralized market and has no geographical limits as it is traded on an OTC system or off the platform.
How did the forex market start? The beginning of money
Forex started based on bartering, as ancient humans practiced the process of trading by exchanging goods with each other because there was no money or bank notes during that era. The trade was in snails, precious stones, etc.
In commercial operations, the value of a commodity is determined by many of these means, such as buying meat in exchange for four snails. These mediums were soon replaced by coins of gold, silver, and precious metals, and then people tended to use fiat currency as a substitute for gold and silver, so that, not a banknote, was printed depicting a certain amount of gold, and that was the beginning. The emergence of money we know today.
What is Forex market size?
In terms of liquidity and trading, the Forex market is the world's largest financial market, reaching $6.6 trillion per day, equivalent to 25 trillion Saudi riyals per day in April 2019. From a liquidity perspective, Forex cannot be compared to other financial markets. For example, the New York Stock Exchange NOSE, the world's largest equity market, has daily sales of less than $70 billion.
Who Trade Forex? What is the reason for its huge liquidity?
This enormous liquidity in the forex market is due to the presence of various classes, such as major investment banks, central banks, mutual funds, investment management companies, brokerages, sole traders, and traders with financial purposes as hedging. In addition to the development of communication and commerce through the Internet and the financial benefits of using financial facilities or trading Forex, this is what attracts more and more investors in the day-to-day currency market.
The Advantages and Disadvantages of Forex Trading, Is Forex Trading Right for You?
The most important features of the currency market
Huge liquidity and high volume in forex trading
Forex trading is open 24 hours 5 days a week
Forex trading is done in a decentralized manner - OTC
Ease of tracking the Forex market and counting currency news
The possibility of making a profit during the rise or fall of currencies
The possibility of trading in small amounts thanks to the leverage
Ease of opening a real forex account
Disadvantages of the currency market
Degree of volatility and price activity
High risk
Weak supervisory or regulatory side
When can Forex be traded? Forex market working hours and trading hours
The forex market is a decentralized market that operates through various means of communication around the world without a specific geographical location as a center for trading, as the market operates 24 hours a day for five days a week from the beginning of trading on Monday until the end of Friday and the market is closed on Saturday and Sunday for a global weekend. Forex market trading goes through four main periods: The American, European, Asian and Australian trading period, and thus trading does not stop throughout the day as these periods overlap with each other and continue to the next day.
What currencies are there in the forex market?
What is the meaning of currency pairs?
What currencies are traded in Forex?
As we explained earlier, forex is the foreign exchange market, so traders trade on the currencies of countries and the most famous of these currencies are the currencies of the major countries, which have an economic weight, and often attention is paid to eight currencies as they are considered the most important and most traded among the world's currencies, namely:
1. The US dollar USD - the currency of the United States of America.
2. The euro is the currency of the European Union.
3. The British pound sterling GBP - the currency of Britain.
4. Japanese yen JPY - it is the currency of Japan.
5. Australian dollar AUD - it is the currency of Australia.
6. New Zealand dollar NZD - the currency of New Zealand.
7. Canadian dollar CAD - the currency of Canada.
8. Swiss franc CHF - it is the currency of Switzerland.
9. Trading system of pairs in the Forex market
How does forex trade work?
There are many different ways you can trade in the foreign currency, but they all work the same way, selling one currency and buying another at the same time. Traditionally, most foreign exchange transactions have taken place through a forex broker, but with the rise of online trading you have the choice to increase the value of foreign exchange using derivatives such as CFD trading.
How to start trading currencies?
First: Learn the basics of forex trading and the most important forex terminology.
Second: Learn to use the forex trading platform
Third: Learn to analyze forex and currency price movement.
Fourth: Learn to manage capital in Forex.
Fifth: Create a Forex Trading Plan.
Sixth: Trading with a demo account before risking real money.
Seventh: Choosing the best forex broker and opening a real account.
And this question always comes to mind!
Is currency trading profitable? And what are the risks of currency trading?
Currency trading is defined by its flexibility in terms of risk management as compared to stock trading. And in the currency trading market, a trader can get more profit when he decides to take more risk, because currency trading is often done through leverage and margin system, which compares to the actual value of money in circulation. And because of this there is a risk of investing in the currency trading market. Thus, you should learn a lot before you start trading and only trade with extra money.
FAGS:
What is Forex?
Forex or what is known as FOREX is the foreign exchange market and it is one of the most famous and largest financial markets in terms of liquidity. Forex trading is done through the exchange of currencies and taking advantage of the price differences between buying and selling of currencies.
How do I trade in Forex?
Forex trading can be through brokerage firms that start the trade by opening a trading account for him on the brokerage platform, and the broker will distribute it with facilities or facilities, or enable him to trade in the market with deposited capital securities.
What is the best forex broker?
There are many criteria and considerations for choosing the best forex broker, including, for example, that the broker is licensed by a reliable regulator, the company’s management has experience in the market, offers competitive prices and commissions, and other criteria, and this article explains in detail how to choose a suitable forex broker.
