Trading Forex
FOREX = Foreign Exchange; currency trading market
The Forex market is the largest and most liquid financial market in the world, turning over 4 trillion USD per day. Participants include banks, central banks, currency speculators, corporations, hedge funds, and other financial institutions. They are connected over an electronic network which allows them to convert the currencies of most countries of the world.
Foreign currencies are simultaneously bought and sold across local and global markets and traders’ investments increase or decrease in value based upon currency movements. The Forex market responds to real time events and news, creating ongoing volatility and trading opportunities.
The Forex market only began to emerge in 1978, when worldwide currencies were allowed to ‘float’ according to supply and demand. Up until 1995 Forex trading was only available to banks and large multinational corporations. Today thanks to the proliferation of internet-based communication technologies, this highly profitable market is open to everyone. The Forex trading markets growth has been unprecedented and continues to be unequalled by any other trading market.
What is a Forex Deal and what does it involves?
Every time you enter into a trade one currency is bought and another sold simultaneously.
The deal is comprised of three components:
- The Currency Pair
- The Principal Amount
- The Exchange Rate
Example: Order to buy Aussie dollars.
