Forex Trading

Mike Anyayahan By Mike Anyayahan, 12th Feb 2014 | Follow this author | RSS Feed
Posted in Wikinut>Business>Investment

Forex trading is a simple buying and selling of foreign currencies for the purpose of making profit. It is also called foreign exchange which is simply abbreviated as fx. It is an exchange of one currency to another. In order to gain from this form of investment, traders take advantage of price fluctuation.

Forex Trading

Forex trading is a simple buying and selling of foreign currencies for the purpose of making profit. It is also called foreign exchange which is simply abbreviated as fx. It is an exchange of one currency to another. In order to gain from this form of investment, traders take advantage of price fluctuation.

In this modern age, investing becomes so complex that even investment specialists continuously study every market. In the past, stock market was the only popular form of investment for many. Because of continuous study, investment specialists have discovered the possibility of making money out of money through interbank transaction.

Forex trading is an investment market where currencies are being bought and sold from one bank to another. There is no definite exchange area where traders can meet to transact. Transactions are done electronically across all banks in the world at any time during different time zones.

With the help of the internet, investing in foreign exchange becomes possible anywhere. Although it is divided into different markets such as Australian market, Asian market, European market, and the US market, traders can transact at home through the internet wherever they are and whatever market they belong to. Thus, it becomes a global market.

Forex trading is considered to be the largest market among all investment markets in the world. With several trillion dollars of trading volume per day, it is also considered to be the most liquid market. Because of this, traders can easily get in and out of the market any time they wish to.

Fx transaction happens among market players. Major players are hedgers, arbitrageurs, speculators, banks, central banks, companies, brokers, and traders. These players can become buyers or sellers at one point or the other. Some enter the fx market for various purposes. Others are there for profit. Whatever purposes there may be, there are always ready buyers and sellers.

Forex trading is open 24 hours a day. It starts at the opening of New Zealand and Australian markets and closes at the closing of the US market during which New Zealand and Australian markets open for another day. This means that when a certain market closes, another one opens.

Nowadays, the popularity of foreign exchange as a form of investment has been significantly increasing. Moreover, the growth of the number of retail fx traders is also very significant. With the development of information technology, investing in foreign exchange has become available even for small players. Therefore, more and more people start investing in forex trading.

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