The Forex market is something that few people know about, yet almost everyone has been a part of in their lifetime. This article will explore what the Forex market it, who uses it, how to trade works, as well as other great information for anyone looking to learn more about this mysterious market called Forex.
First, what is the Forex market? The term Forex is actually an abbreviation for the full term Foreign Exchange Market. It is a worldwide currency trading market used by investors, businesses, and everyday people. The market is so big, it trades $4 Trillion, on average, every single day. The market is open 5 days a week, starting at 5pm eastern time Sunday night and stays continually open until 5 pm Friday night.
Next, without realizing it, you have probably used, directly or indirectly, the Forex market sometime in your life. If you have ever taken a trip to another country and needed to exchange your money, you were using the Forex market. Or perhaps, you bought something in a shop that was made in another country; you were making a Forex trade. You paid the cashier in your currency, yet the manufacturer of the item was paid in a difference currency, that is a simple Forex trade. People are trading currencies all the time, through exports, imports, travel, and more money is being distributed and redistributed all the time 24 hours a day.
So how can people make money and this be an “investment” for traders? This is the basics of how the Forex market works. Let’s say you take a trip to France in 2000 and the exchange rate at that time was 1 Euro equaled about.90 USA cents. You decide to hold onto 500 Euros for a few years, you store them in a safe at your house. In 2005 you pull back out your 500 Euros and take them to the bank, to exchange back for US dollars. Now the price of 1 Euro is worth $1.40 in US money. You just earned an extra $250 simply because you held on to those Euros and bought and sold the money at the right time within the market.
Many of the world’s giant banks, hedge funds, and insurance companies actively trade currencies all the time, as a means to make money. These companies will trade in very large amounts, which by doing so allows them to profit or lose millions for a simple fraction of a cent in movement in the exchange rates. A currency’s value will fluctuate depending on the supply and demand at the time, which is why buying and selling at the right time in the market is so important.
The reason most people do not know about the Forex market, is because historically this market had been exclusive to industry professionals and giant corporations. However today anyone can do Forex trading right from the comfort of their own home. All that is needed is a computer, internet connection, and a small trading account.
Hopefully this article was able to provide some great information about what the Forex market is all about, who trades on it and what is available through the market. There are millions of tools and resources available to anyone who wants to learn more about this market. Trading platforms, software, strategies, and other helpful guides can be used to help anyone trade successfully in the market today.
The author of this article also recommends a website where new traders, as well as experienced traders can learn more about how to trade Forex online. Be sure to check it out before you start trading in the Forex market.