Forex market (FX market) is an interbank currency exchange market. The term Forex is used for a currency interchange only, not for denoting all types of currency operations. The currency market operations can be trading, speculative, hedging or regulatory. Thanks to fast development of a global net, Forex market offers real opportunities for every person of any age. Only Internet access and a trading platform are required.
Almost everyone wants to quickly learn the ways of trading in FOREX market, which is most commonly known as the foreign exchange market. However, the beginners should understand the basics to ensure that how the dynamics of this market works. The currency trading is considered as the largest industry or market worldwide as it comprises of more than trillion trading transactions in terms of daily volume. Investors want to learn more about this market so that they can trade efficiently within the industry. It is even the most liquid market; however, there is no centralized place for the trading of currencies in the market.
In the currency pair, the first currency is known as ‘base currency’ and the other currency is called ‘counter currency’. The currency pairs are considered to be used as dominations for currency as they are believed to be denoted as one unit for buying or selling. When a currency pair is purchased, counter currency is sold and base currency is bought. The four major currency pairs observed globally are given as under:
There are no accurate figures, as this market is over-the-counter, and there is no compulsory registration and publication of operations data. In 2005-2006 the daily Forex market turnover was changing by different estimations within the range of 2-4 trillion US dollars. A part of this turnover is provided by a marginal trading which allows conducting contracts for the amounts exceeding the real monetary funds of parties. Regardless of the character and the targets of operations, a huge turnover guarantees high Forex market liquidity.
There are plenty of adverts on the Internet about the
ways to collect profit on Forex market, however, one should take into account
that this work is not a full-time occupation and has no steady salary. Only you
can determine your wage, depending on your loss or gain. This business is about
starting capital and inevitable risks. Marginal trade on Forex has a number of
peculiarities: there is no career ladder, no huge initial capital, the
operations are similar and do not require constant education, potential yield
rate or loss risk are high. These characteristic features make the marginal
trade attractive for beginning the stock exchange activity with a small
start-up budget. You can familiarize yourself with market trading on demo
accounts. For that purpose you only need to choose a broker that interests you,
download a trading platform and register a demo account. Every business can
bring either yield or loss. To make profits exceed losses you have to study the
FX market and the nuances of trade. As soon as you can observe the rules of
currency market, you will become a successful trader.
In the next article we will talk about how long it takes to become a profitable trader.