What is Forex (Foreign Exchange)?
Foreign Exchange (FOREX) is the arena where a nation’s currency is exchanged for that of another. The foreign exchange market is the largest financial market in the world, with the equivalent of over $1.9 trillion changing hands daily; more than three times the aggregate amount of the US Equity and Treasury markets combined. Unlike other financial markets, the Forex market has no physical location and no central exchange (off-exchange). It operates through a global network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another in all the major financial centers. Traditionally, retail investors’ only means of gaining access to the foreign exchange market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has increased rapidly over time, especially after exchange rates were allowed to
Forex means Foreign exchange market or currency market. We should know about Forex trading and Affiliate program before do forex trading. Currencies are traded against one another. Each pair of currencies hence constitutes an individual product and is by tradition noted XXX/YYY, where YYY is the ISO 4217 international three letter code of the currency into which the price of one unit of XXX currency is expressed. For example, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar. In other words, a currency’s value can be attached to another country’s currency, such as the U.S. dollar, or even to a basket of currencies. A country’s currency value also may be fixed by the country’s administration. However, most countries float their currencies freely against those of other countries, which keep them in constant instability.
The simple sense of Forex (Forex currency exchange, Foreign Exchange) is simultaneous purchase and sale of the currency or the exchange of one country’s currency for the one of another country. The world currencies do not have a fixed exchange rate and are always fluctuating being traded in the currency pairs like Euro/Dollar, Dollar/Yen an others. 85% of daily trades are taken by major currencies trading. Investments usually deal with 4 major pairs: Euro against US dollar, US dollar against Japanese yen, British pound against US dollar, and US dollar against Swiss franc or EUR/USD, USD/JPY, GBP/USD, and USD/CHF used to sign these pairs accordingly. These major pairs are considered as Forex market’s “blue chips”. You will not receive any dividends on the currencies. Well known “buy low – sell high” gives the profit for currency trades. In case you have a forecast that one currency would get higher to another you can exchange the second one for the first one and wait for the profit. If
