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.


.

Things You Need To Know Before Doing Bus…

If you’re looking for a country to expand your business into, Brazil might just be the answer. As an economic leader in Latin America and part of the developing markets...

Advantages of Starting a Business in Mex…

While Mexico might not be the first place that springs to mind when most Australians think of setting up and running a business, the ideal might not be as far-fetched...

Fertile Future: Why Sydney Continues to …

When we have such an expanse of beautiful land, and Australia continues to be associated with 'the bush' and rural areas, it can come at a surprise to some that...

Read more to improve your trading perfor…

If you are not prepared with a proper trading plan, the executions will not return profits. Instead, you will experience big losses from the trades. As Forex trading business deals...

MixMarvel successfully builds up the com…

Following a successful series of roadshows in Melbourne, Perth, and Sydney, MixMarvel has paved the way for the development of blockchain-based games in Australia. During the roadshows, MixMarvel not only...

e-Commerce is Growing in Australia Thank…

Australia and other regions nearby have been experiencing a major shift in online business. Some economists are calling this a major boom for e-commerce, and it is all thanks to...

Top 5 Ways To Make Your Website Content …

When you want to make your website content as relevant as possible, you must ensure that you have taken several steps to improve the way you write, change the keywords...

4 ways to market your business online

When small businesses get started, many rely solely on traditional forms of advertising, but the online marketplace provides a better and easier to highlight your brand. Once considered a new...

The Trolley Tactician - How Supermarkets…

Supermarkets are a tactical minefield of strategic elements designed to make you spend more whilst you are there. Getting people in the door is only part of the marketing battle...

3 Ways Your Business Can Use Drones

Australia has a wealth of businesses, both small and big, who help to contribute to a booming economy. There are thousands of businesses across the country, all in different industries...

The Top Five Myths About Being an Entrep…

Do you remember the last time you heard someone refer to themselves as an ‘entrepreneur’? It was most likely a contestant on a reality show, thinking because they have three phones...

Protecting your Super Changes (Latest Up…

Superannuation may not be a sparkling dinner conversation, but that should be. Many of us ignore our superannuation, but as we have come to the end of the financial year...

An Introduction to Forex Trading

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...

5 must-try foods from around the globe

Indulging in new culinary experiences is a luxury, namely because it can be an expensive endeavour. However, if you are someone who likes to try new and wacky meals, then...

SEO to Market Your Business

Today, operating a good website is a basic part of establishing and growing your business. Once your site is up and running, you need to incorporate all the best techniques...

Choosing Flat Top Tipper Trailers

A tipper trailer can be a great asset when you need to transport bulk goods or remove rubble etc at regular intervals. Compared to standard tippers, the flat top tipper...

The Weirdest Guinness World Records

We have all dreamed of making history at one point or another. Outliving the mortal coil and being remembered for something truly amazing has been the desire of many. The...

Bill Shock - 4 Steps To Take If You Get …

Paper usually can’t punch you in the stomach, but an unexpected bill can. These powerful blows can manifest in the form of medical bills, car repairs, a broken phone, or...

Understanding Security Token Offerings (…

The market appetite for compliant crypto currencies with very high quality is only slated to grow further and that is great news for the STO model that can significantly impact...

Effective Wi-Fi Solutions Can Enhance Cu…

Connected world is the buzz word today and that has made Wi-Fi more a necessity than a luxury. For big as well as small businesses, including business individuals Wi-Fi is...

Looking for a Change? Top Freelance Jobs…

Get up at 6:00 am. Arrive at the office by 8:30 and spend at least nine hours behind your desk. Go home and watch some TV before falling asleep, rinse...

4 kinds of work breaks you need to intro…

Did you know that 18% of Australians eat their lunch at their desk or workstation? Despite research showing that employees are more productive at work when they take breaks, many...

6 essential things your small business n…

As a small business owner, there is a lot that you need to think about, from how to maximise your small office space to how your business can cut costs...

The Rise of Micro-Influencers

The dominance of influence marketing has taken the world of online marketing by storm. In a consumer market that is increasingly sceptical of brands, companies are outsourcing their promotion to...