The Entrepreneurs

An Introduction to Forex Trading

  • Written by News Company

Forex trading has become more popular in recent years. And the internet has been a major driver of its growth.

The foreign exchange market, known as the Forex market for short, is the largest and most liquid financial market in the world. According to a survey by the Triennial Central Bank, this financial market had a daily turnover of approximately $5.1 trillion as of 2016.

The New York Stock Exchange (NYSE) is the largest stock market in the world. Yet, its daily trading volume is $22.4 billion. Of course, it pales in comparison to the foreign exchange market. The forex market is massive indeed!

The Forex Market

Forex market is the world's digital market where currencies are traded.

Although the total trading volume of the Forex market is indeed massive, retail trading, however, accounts for less than 7% of the market share.

Retail trading is a segment of the forex market where individual traders speculate on the fluctuations in the exchange rates of currencies.

You can partake in the Forex market via a number of ways such as spot, options, and swaps. Whichever it is, the currency market is on 24 hours every day and for five days of the week.

Currency and Currency Pairs

By now, you would have known that currencies are the asset class traded in the Forex market. But it is not as simple as that. Although currencies are the instrument traded, not all currencies are traded “equal.”

The lots of currencies in the Forex market are grouped according to how heavily they are traded. Consequently, the major currencies are the most traded and are:

  • US Dollar (USD)

  • Euro (EUR)

  • Japanese Yen (JPY)

  • Great Britain Pound (GBP)

  • Swiss Franc (CHF)

  • Canadian Dollar (CAD)

  • Australian Dollar (AUD)

  • New Zealand Dollar (NZD)

Forex transactions are conducted in pairs. When you buy a currency pair, you buy the base currency and sell the quote or counter currency. In every currency pair, the first currency is the base; the second is the quote.

Participants of the Forex Market

The foreign exchange market, being the world's largest financial market, has many participants. As previously discussed, retail traders (individual traders) are one participant, accounting for about $400 billion of the overall trading volume.

However, the greatest bulk of the trading volume is contributed by institutional investors such as banks, investment managers and hedge funds, and corporations.

Of those institutional investors, the interbank market has the greatest volume. Here, banks buy and sell currencies with one another, via interconnected networks. Moreover, they also help brokers facilitate speculative trades.

In this type of trades, banks earn their profits through the difference in the bid and ask prices, known as the spread. For central banks specifically, the Forex market provides an avenue for them to regulate their national currencies for the stimulation of domestic economic growth.

Investment managers and hedge funds participate in Forex for speculative reasons and when buying and selling international securities. For corporations, currencies have to be exchanged to export and import their goods.

On a final note, ForexCT is a multiservice online trading provider that can help you get started in Forex trading.

Ways to maintain your body shape

Every girl wants to look beautiful and slim. Some for these purposes go to the gym or fitness club, others go swimming, but some want a good figure, without leaving...

Tips to keep your car shiny

You need suitable equipment to clean your car’s body properly. You must wash your vehicle gently. It is advisable to use a sponge or a soft cloth to avoid scratches...

Things to Consider For a Healthy Work En…

What does a healthy work environment mean? What are the keys? A healthy work environment is not just about giving fruit to workers. Achieving a healthy work environment requires consolidated...

How to Become a Pro at Commodity Trading

Do you know the world of trading has gone beyond stock trading? Many people are unfamiliar with the term ‘commodity trading’ as their horizons have not outspread from stock trading...

Coin Laundry Vs Home Laundry

Did you ever think of how easy and convenient our lives have been made by technology? The new technological advancement has improved the way and standard of living of people Remember...

5 REASONS WHY ALL BUSINESS MUST HAVE A …

Keeping track of all the business doings is important; a phone system makes it easy for the customers to reach any business location. In this fast-moving world, it is a...

How To Add Life To Your Dull Home

No matter how much effort you place in your house, it will become outdated and dull after some time. There is a common practice among homeowners to update the house...

Importance of Banners for Effective Mark…

Marketing is the process of creating value for customers. Marketers develop new strategies every now and then to make sure their product or service is positioned in the customers’ mind...

Benefits of wearing name badges in the o…

All the multinationals have badges of either their name or company’s name on it. Name badges are not only a means of identification in retail stores offering products or services...

Get Quality Prizes on Art Unions Austral…

For years, Art Unions Australia has been empowering Australians with opportunities to win awesome prizes ranging from prize homes to cars, vacations and other wonderful benefits. Art Unions’ prizes are...

Benefits of using scissor lifts for cons…

A scissor lift is a work frame used to carry loads of people. Sometimes it is termed a table raise. It is going upward when the crossover underneath the platform...

Common signs and symptoms of osteoarthri…

What are the most common signs of osteoarthritis? How to prevent this condition which, over time, degrades the quality of life and makes certain tasks difficult? WHAT IS OSTEOARTHRITIS? Osteoarthritis is characterized...

Roles of Machines in Transforming the Co…

What does a nail gun, pickup truck, cement mixer, and a portable circular saw have in common? The answer is simple: these are all equipment found on a construction site...

Tips to manage your money the right way

Well, money can't buy happiness, but it can give you financial security. Handling and saving money is not an easy task, and not everyone can do it. By managing your...

Why a data recovery service is important…

When we browse the web, or just perform some actions from our computer, we may lose our data. Some internet users downplay and abandon the strategic importance of data recovery...

Ten Things a Marine Surveyor Wants You t…

It is imperative for anyone interested in buying a boat to get a marine survey carried out on the unit he/she is planning to purchase. The reason for a marine...

10 ways to simplify your meetings at wor…

Who hasn’t struggled to stay awake during a long three-hour meeting and left with a question in their mind that what was the purpose of it? Be it, staring at...

7 Ways to Celebrate New Year's Eve in Sy…

When it’s time for getting the most out of your New Year’s, the options are never-ending but Sydney’s New Year’s celebrations need to be on everyone’s bucket list; if you...

7 advantages of investing in a platinum …

Investing in the platinum bar or palladium is a novel phenomenon, and most people do not know much about it. Platinum is a word that most of us would...

10 Signs You Care About Your Career

Everyone strives for similar things in life. Happiness, success and wealth are always at the top of our lists. But not everyone cares about putting in the work to achieve...

A list of supplies to keep your workspac…

Let’s start with the well-known saying, “Organizing is something that you do before you do something actually”. If you have decided to improve the workspace in a more organized way, it...

Easy Ways to Move without Stress

Moving and shifting houses is not an easy task at all. Apart from taking a significant amount of your time, moving also requires strategic planning. Where to start and what...

Ways to grow your online business

Business proliferation is a very common practice among business owners. In fact, it is important to expand the business venture to attract new customers globally. Most people think of advertisement...

Tips to Help You Make Smart Financial De…

Each day every one of us is confronted with making a difficult financial decision. This trivia impacts every aspect of our upcoming financial dealings and defines the features determining our...