Forex trading involves transactions that occur in the foreign exchange market, which is also referred to as the fx, currency or forex market. This is the largest financial market with estimated turnover of more than $3 trillion per day. A foreign exchange rate is the relationship between two different currencies. It can be the US dollar vs. another currency or two currencies not involving the US dollar, otherwise referred to as a cross (currency) rate. In any case, this relationship is determined by the amount of one currency need to buy or sell a single unit of another currency at any point in time. Currency trading occurs in the foreign exchange market, which is considered the largest financial market in the world with estimated daily turnover of more than $3 trillion. The foreign exchange market is also referred to as the forex, fx and currency market. The relationship between two currencies is determines a foreign exchange rate. This I calculated by the amount of one currency needed o buy or sell one unit of another currency.
Currency trading is transacted in the foreign exchange market, otherwise known as the forex or fx market. The forex market is the largest financial market on the globe with daily average turnover exceeding $3 trillion. A foreign exchange rate is determined by the relationship between two different currency pairs. What this means is the amount of one currency that it would take to buy or sell a single unit of another currency.
Currency trading is transacted in the foreign exchange market, otherwise known as the forex or fx market. The forex market is the largest financial market on the globe with daily average turnover exceeding $3 trillion. A foreign exchange rate is determined by the relationship between two different currency pairs. What this means is the amount of one currency that it would take to buy or sell a single unit of another currency.
Currencies are quoted one vs. the other and this is why they are called currency pairs. For example, the EUR/USD is the EURO vs. the US Dollar, USD/JPY is defined as US Dollar vs. the Japanese Yen, USD/CAD is the US dollar vs. the Canadian dollar and so on. The EURO, British Pound, Australian Dollar and
Prior to 1971, the foreign exchange market was made up of fixed currency relationships. The foreign exchange market was changed forever by the Bretton Woods Accord, which signaled a new era by ending fixed currency relationships and allowing forex rates to float. While the market has evolved since that ground breaking accord, the floating rate system is still in effect in the foreign exchange market today. Forex trading is a 24-hour, 5 day a week market. It starts each day in
Forex trading was once controlled by commercial, central and investment banks. It has evolved over the years as other players have joined in to take on a greater role. These include hedge funds, fund managers, multi-national firms, private investors and retail traders. The growth of the internet and electronic platforms have seen forex trading evolve so that traders can follow the market around the clock and trade online from any location where there is online access.
A number of factors have attracted retail forex traders to currency trading. These include the ability to trade 24 hours per day 5 days per week, the high level of liquidity available in the foreign exchange market, tight bid-offered spreads, the opportunity to trade in both up (bull) and down (bear) markets, high leverage (low margin requirements) and general volatility in the forex market.
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