Forex trading in simple words means trading with currency. Forex, FX, Foreign exchange, it means trading with currency and right now it’s the fastest growing market in the world. Trillions of dollars are traded every day. The main players in this market are banks, investors, hedge funds and regular people who are interested in taking a bite from this trillian dollar market, regular people like me and you.
The purpose of Forex traders is to get profit from buying and selling foreign currencies (also gold and silver). For example you can use Euro to buy US dollar or you can sell Euro for Yen. The exchange rates are constantly changing due to demand and supply, world news, stuff happening in politics, economics and so on (more on this topic in next articles).
The main idea is of course, like with any investing objects, to buy cheap and sell high and to take profit in between. Compared to the stock market forex is a 24/7 market.
In order to successfully trade in forex market, you definitely need to know the overall basics of investing and market analysis. You also need to get familiar with the structure of forex, the different mainly traded currencies, how and why the prices changes exactly, what are the main reasons behind the price changes, what affect them; what are the principles behind the price formations; what are the risk levels; how and where can you get the information to minimize your risks; how to analyse the currencies; how to predict price movements. So there is lots of things to know before you can actually start trading.
Forex trades (trading on board internet platforms) are non-delivery trades. This means that currencies are not physically traded. Instead there are currency contracts which are agreed upon and performed.
