What is Forex?
From Thousand Smiles Wiki
All trades take place between 2 different currencies giving you the simultaneous purchase of 1 currency with the sale of another. Currencies are quoted in pairs, like the EUR/USD. The 1st listed currency is termed the base currency, while the 2nd is called the counter or quote currency. The base currencywill be the basis for the buy or the sell. If you buy EUR/USD you've bought Euros and simultaneously sold dollars. You'll do so because you expected the Euro to appreciate (go up) relative to the US dollar.
The fundamentals of Forex are not complicated: You buy a currency when it's low, sell when it's high, and take a profit. You could even make a profit by selling high and then buying low. Like any other market there is a bid/offer spread. The bid/offer spread relates to the buying and selling spread between both currencies. The bid price is the price at which you will be able to sell the currency. The ask price is the price at which it is possible to buy the currency. It requires time and practice to discover ways to predict the fluctuations in the Foreign Exchange market and become successful a Forex trader. There are numerous factors that affect the price of a particular currency in relation to its value against other currencies; from the national economic outlook to political change. A successful Forex trader learns how to have the benefit of these factors through fundamental or technical analysis. There are hundreds of educational materials available online, that will enable you to develop your own analysis of the Foreign Exchange markets.
The Forex market has no single universal exchange. Fx trading is conducted electronically over-the-counter (OTC), which suggests that all transactions occur via computer networks between traders everywhere in the world; instead of on one centralized exchange. The Forex market is open 24 hours a day, five and a half days a week. Currencies are traded worldwide in all the main financial centres, each with its own regulatory body. In the UK the regulatory body is the FSA (Financial Services Authority).The requirement to exchange currencies is the main reason why the Forex market is the largest, most liquid financial market in the world. It dwarfs other markets in size, even the stock market, with a mean traded value of around $4 trillion per day. So if you're looking for a market to trade, then look no further than the Forex market. All that you need is a computer, an internet connection plus a Foreign Exchange Broker. I hope that this article has helped with your understanding of the Forex market, for more information please visit Resources4traders.com
