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forex market

What is Forex Market?

Foreign Exchange market, also known as Forex Market, is the biggest and most liquid market in the world. It is basically a financial market where people trade currency or money to gain profits. Unlike bonds and stocks, your profits are not in the form of dividends, but in the form of money. For people who are looking for ways to make money, trading in forex market can be a good investment.

On other hand, trading in online forex market is a major decision. Due to the nature and scale of this market, trading in this market entails great deal of knowledge and experience. Forex market operates 7 days a week, 24-hours a day; it doesn’t stop for anybody. Unlike bonds and stocks, it doesn’t have a centralized location where you can do your trade. The whole market is electronically driven, which makes it accessible to individuals, companies, banks, etc., anytime, anywhere. Hence, it is considered as an Over-The-Counter (OTC) market.

The basic idea behind a forex market training course is to buy currency of one country and trade it or exchange it with another country’s currency. To gain a profit in this market, you have to buy a currency at a low exchange rate and sell it when its exchange rate hikes up. This sounds simple enough, but knowing what currency to buy, when to buy, and when to sell is the difficult and tricky part. It is a general fact that currencies don’t have fixed exchanged rates; in fact, they fluctuate all the time due to numerous reasons.

Forex trading

Before you start trading in the forex market, there are a couple of things that you should know:

1. Currencies are always traded in pairs. Currencies are normally represented by three letters: US Dollar (USD), Japanese Yen (JPY), Euro (EUR), etc. The four most common pairs exchanged in the market are Euro against US Dollar (EUR/USD), US Dollar against Japanese Yen (USD/JPY), British Pound against US Dollar (GBP/USD), and US Dollar against Swiss Franc (USD/CHF). These four pairs are known as the “blue chips” of the foreign market.

2. Learn to read the forex chart. You can’t thrive in the day forex market if you don’t know how to read a forex chart. A forex chart shows graphical representations of the currencies’ price movements over a specific period of time. This is a tool that you can use to help you determine future price movements of a particular currency so that you would know what to buy, when to buy, and when to sell. A forex chart also gives you an idea on how other people view the facts and how they’ve been reacting to it. On the other hand, it is not the only indicator of a currency’s future exchange rate.

3. You only need three things to get started. It’s very easy to join this market; you just need a high speed internet, a funded forex account, and a trading system.

Some pointers

In the forex market, you’ll tread through series of turbulent and dangerous waters. Since currencies fluctuate all the time, one minute you’re winning, the next minute you’re losing. This is a game of uncertainty; so if you don’t have the heart for it, then perhaps it is not for you. It is also important that you keep track of the news because current events in a country affect the country’s currency exchange rate. Watch out for disasters, economic downturns (e.g. high unemployment rates, financial crisis, etc.), government scenarios (e.g. political instabilities, elections, etc.), and so on and so forth since these are major indicators of a country’s current state.