Forex Trading - Introduction

Forex Trading - Introduction

Forex Trading as commonly called stands for Foreign Exchange trading. It is the largest financial trading market in the world who have a daily turnover in the amount of US $ 1 trillion. The number denotes the volume amounting to about 28 times the combined volume of all U.S. equity trading markets.

Forex Trading means buying a foreign currency payment in another. Any transaction that involves buying and selling currency at the same time, since currency trading is always done in pairs, for example USD / EUR or USD / GBP etc.

Foreign currency trading or Forex Trading is undertaken for two purposes. Approximately 5-7% of the transactions undertaken by institutions that do business in foreign countries or companies that need to convert their foreign exchange earnings in domestic currency. The rest of Forex Trading is done purely on speculative basis with profit objectives.

Trading speculation purposes, the best profit making opportunity lies in most currencies traded (obviously the currencies of most economically developed countries), also called "majors" in forex trading parlance. They consist of U.S. Dollar, GB pound, Japanese yen, the European Unions Euro, Swiss Franc, Canadian Dollar, Australian Dollar, etc.

The forex trading market is a 24 hour market, beginning in Sydney sunrise and opening markets to the west as the sun rises, Tokyo, London, New York, in that order. This relieves investors from around the world to respond immediately to fluctuations in value of their holdings caused by political, economic or social events occurring around the world, be it day or night.

The Forex trading market does not operate any offices or exchanges, as well as in the case of other financial markets. It is considered OTC (over the counter), or the market 'interbank' trade takes place between the parties over the telephone or electronic network. Forex trading is the biggest financial volume business, but goes on behind the curtains with full transparency




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