What is Forex?
From Thousand Smiles Wiki
All trades happen between two different currencies giving you the simultaneous purchase of one currency along with the sale of another. Currencies are quoted in pairs, like the EUR/USD. The first listed currency is called the base currency, while the 2nd is known as the counter or quote currency. The base currencywill be the basis for the buy or the sell. If you buy EUR/USD you have bought Euros and simultaneously sold dollars. You would do so if you ever expected the Euro to appreciate (go up) relative to the US dollar.
The fundamentals of Forex aren't complicated: You buy a currency when it's low, sell when it's high, and take a profit. It is possible to even make a profit by selling high and then buying low. Like any 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 it is possible to sell the currency. The ask price is the price at which you will be able to buy the currency. It requires time and practice to learn to predict the fluctuations within the Fx market and become successful a Forex trader. There are many factors that affect the price of a specific currency in relation to its value against other currencies; from the national economic outlook to political change. A successful Forex trader learns the best way to benefit from these factors through fundamental or technical analysis. There are masses of educational materials available online, which will enable you to develop your own analysis of the Fx markets.
The Foreign Exchange market has no single universal exchange. Forex trading is conducted electronically over-the-counter (OTC), which suggests that all transactions occur via computer networks between traders all over the world; rather than on one centralized exchange. The Foreign Exchange market is open 24 hours each day, five and a half days a week. Currencies are traded worldwide in all the major financial centres, each with its own regulatory body. Within the UK the regulatory body is the FSA (Financial Services Authority).The necessity to exchange currencies is the main reason why the Forex market is the most important, 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 are looking for a market to trade, then look no further than the Forex market. All that you need is a PC, an internet connection and a Fx Broker. I hope that this article has helped with your understanding of the Forex market, for more information please visit BrokerComparison.co.uk
