What is traded on the Foreign Exchange market?
The answer is simple: money. Forex trading is where the currency of one nation is traded for that of another. Therefore, forex trading is always traded in pairs. Te most commonly traded currency pairs are traded against the US Dollar (USD). The major currency pairs are the Euro Dollar (EUR/USD), the British Pound (GBP/USD), the Japanesse Yen (USD/JPY), and Swiss Franc (USD/CHF). As mentioned before, because there is not a central exchange for the forex market, these pairs and their crosses are traded over the telephone, facsimile, and internet, through a global network of banks, multinational corporations, importers and exporters, brokers, institutional investors, as well as individual traders. Now, almost anyone with a computer and an internet connection can trade currencies just like the world’s largest banks do. There are now over 6 million trading accounts worldwide up from only 1.7 million in 1997. Unlike the US currency futures markets, which have fixed daily trading hours, the f
The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the euro and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY). Because you’re not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy. In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country’s economy, compared to the other countries’ economies. Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex m
