Monday, 16 May 2016

What is Forex Trading?

Photo Credits: Mark Hodson

The word FX or Forex means Foreign Exchange. It means the exchange of money like gold, silver, oil, currencies or commodities etc. Hence, Forex Trading can be described as the trading of gold, silver, oil, currencies or commodities etc. The Forex trading takes place in Forex Market. Forex Market is the place where Forex Traders do trading. They trade different currencies, oil, gold, silver, commodities or any other form of money.

For Example, You have 5 dollars and you want to convert them to euro. You head to money exchange and ask for the rate of dollar. Here, you are asking the exchange rate of dollar against euro. Suppose the guy at money exchange tells the rate as 1 dollar= 0.9 euro then you handover him 5 dollars and in result he will give you 5 x 0.9 = 4.5 euros. In this example, you traded dollars for euro and the money exchange company traded euro for dollars. 

Forex market is the largest market of the world. There isn't any bigger or larger market than the Forex market, whether it would be buying or selling. The daily turnover of Forex market is more than 5 trillion USD (United States Dollar). Traders buy and sell in Forex market in order to keep it in trading. The Forex traders play the most important role in the survival of the Forex market. Forex market is open for every trader to do trading. The new era technology made this market a faster and better market than any other market. Forex trading is being done online almost by every trader. Within a blink of an eye, billions of money is being exchanged and the Forex market is in existence. 

I hope you enjoyed reading this article. Please share your valuable feedback for this article in the comments.

What is Forex Trading?

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