Hello Forex World!
Define Forex
Foreign exchange market (a.k.a. forex, FX, or currency market) is a decentralized financial market for currency trading. Forex bustles with global activity from sunrise to sunset, except during weekends. To be exact, forex trading starts from 20:15 (UTC) Sunday to 22:00 (UTC) Friday. The forex market is the largest financial market in the world, with a daily turnover of about 3 trillion or more.
Currencies by Jason's Travel Photography from flickr.com
The main purpose of forex is to assist international investment and trade. The conversion of one currency to another is made possible through foreign exchange market or Forex market.
2 Types of Retail Forex Brokers
- Brokers – agents who seek best price in the market for a retail order and deal on behalf of retail customer—and charge commission.
- Dealers (market makers) – are the opposite of brokers and normally act as principal in transaction against the retail customer and quote a price they might deal at. The retail customer can take it or leave it.
Important: Retail Customers (a.k.a. Forex Traders) should be aware as to what type of Forex Brokers they deal with. Brokers charge commission and offer best inter-dealer forex rate. Dealers charge nothing but price offered could be lower than available due to conflict of interest.
Forex Trading Centers
London is the main trading center; also, New York, Tokyo, Hongkong, and Singapore. Forex daily trading cycle consists: Asian session, European session, North American session, and so forth. No forex trading session on weekends.
Currencies are traded against one another. In a currency pair, first is the base currency and second is counter currency. The base currency is usually the stronger currency of the pair—except for euro (EUR), which remains the base currency in any pair as mandated by ECB (European Central Bank).
Most frequently traded currency pairs are: EUR/USD, USD/JPY, and GBP/USD.
World Currencies by Helcim from flickr.com
3 Elements that Influences Forex Trading
- Economic – factors like economic policy and economic conditions
- Political – conditions inside and outside that may have strong effect on currency markets
- Psychology – perceptions based on behavioral economics and finance that may affect market prices
How to Trade Forex – A Quick Summary
- Read about forex
- Look for a good and reputable broker
- Study currency fluctuations
- Watch current price on charts and learn technical analysis
- Open demo account to experience when to enter and exit trades
- Participate in forex forums
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Forex rates these days are quite low, i would not invest in forex this month`”.