About Forex Trading
What is Forex Trading?
The question “What is Forex trading?” is one of the most frequently asked questions among beginning traders who want to open an account but still have no idea about trading and need some information to start. Understanding Forex trading implies knowing what Forex is - Forex is a currency exchange market. 24 hours a day and 5 days a week millions of traders throughout the globe take advantage of highly liquid financial instruments and trading volumes. Forex has been one of the world's most revolutionary and innovative financial markets so far. What is more attractive about Forex is that, it is most probably the most affordable yet potentially beneficial market for trading.
To explain what Forex trading is in a very simple way it can be said that it is about trading currencies in the exchange market, which is done through an online trading platform. To have a clear and full understanding what Forex trading is we endorse you to take a look at the evolution of monetary system and the emergence of Forex market. After that it will be easier to understand what instruments are traded there, how they are divided into such groups as major, minor and exotic currencies and why overall trading is needed.
Benefits of Forex Trading
- No fees or hidden commissions
- 24 Hour Market Action
- Ability to trade Dozens of Currency Pairs
- Customisable Leverage to maximize your profit opportunities
- Profit Potential from Rising and Falling Prices
- The Highest Liquidity Compared to Other Financial Markets
- Access the market from various devices through online trading platforms
Forex Market is a decentralized global market where all the world's currencies are traded against each other, and traders make a profit or loss from the currencies’ value changes.
This section reveals the main advantages of the Forex market over other financial markets. Here you can find out why the Foreign Exchange market is so attractive for traders and learn all the advantages of the Forex market.
The table below provides the following list:
The group of most actively traded currency pairs are considered as Majors. They comprise the largest share of the foreign exchange market. Forex major pairs are highly liquid, since they are considered to be the most heavily traded currency pairs in the world. Major currency pairs include the most popular currency pairs, available in the market. Major part of the group includes pairs where you can find at once two of the most liquid currencies, such as U.S. dollar (USD), Euro (EUR), Japanese yen (JPY), British pound (GBP), Swiss franc (CHF), Canadian dollar (CAD), Australian Dollar (AUD) and New Zealand dollar (NZD).
The group of Minor currency pairs includes relatively less popular instruments as compared to the Major currency pairs. It is composed of currencies of rather local value, which primary liquidity is first of all provided by the world's major reserve currencies: the U.S. dollar and the Euro.
The group of Exotic currency pairs which are characterized by relatively low trading volumes and high spreads includes the least popular instruments available in the Forex market. They consist of currencies which liquidity is almost entirely provided by the main reserve currencies: the U.S. dollar and the Euro.
In Forex market investors make profit on currency rate fluctuations. The stronger the rate (quotation) changes the bigger your profit or loss is.