LEARN FOREX: What is forex trading?

Dear readers, I hope you really gained a lot from my previous writing. In recent times, there has been a misconception about the forex market and that’s why I’m here to clear the air.

What is FOREX TRADING? IT is simply trading the major currencies of the world at the foreign exchange market which is open 24hours, 5days a week. What is traded on the forex market? The answer is money; forex trading is where the currency of one nation is traded for that of another.

Therefore, forex trading is always traded in pairs and most commonly traded currency pairs are traded against the U.S dollar (USD). They are called the majors. The major currency pairs are the Euro against the dollar (EUK/USD): the British pound against the dollar (GBP/USD): the dollar against the Japanese Yen (USD/JPY): and the dollar against the Swiss France (USD/CHF). The notable commodity currency pairs traded are the Canadian dollar (USD/CAD) and the Australian dollar (AUD/USD). Because there is no central exchange for the forex market, these pairs and their crosses are traded over the telephone and online through a global network of Banks, Multinational Corporations, Importers and exporters, brokers and currency traders. But if you really want to make it big in the forex market, I will strongly advise that as a “beginner” in the business kindly get acquainted with one or two major currency pairs. Study them very well and make sure you understand their volatility period.

And to further simplify forex trading you could easily limit your trading to the two most liquid and widely traded pairs, the EUR/USD and the GBP/USD. This really starts to reduce demand on your time for trading activities without giving up good profit potential.

Traditionally, currency trading has been a professional’s only market, available exclusively to banks and large institutions. However, because of the invention of the new economy, online forex trading firms are now able to offer trading accounts to “retail” traders like you and I. Now almost anyone with a computer and an internet connection can trade currencies just like the world’s largest banks do.