What is Forex Market?
The foreign exchange market, also referred to as the forex market or FX market, is an over-the-counter (OTC) global decentralised market for the purchase and sale of currencies. As the world’s preeminent and largest financial market, it facilitates currency exchanges among its numerous participants. In contrast to traditional stock exchanges, which are centralised, the foreign exchange market functions in a decentralised fashion. It is comprised of an electronic currency trading network comprised of financial institutions, commercial banks, businesses, governmental agencies, and individual merchants.
What is Forex (FX) Trading and How Does it Work?
The process of converting one currency into another is known as forex trading, often known as foreign currency or FX trading. FX constitutes one of the largest and most actively traded exchanges globally, with individuals, businesses, and institutions transacting $6.6 trillion in currency every day. Foreign exchange trading, or forex trading, involves the profitable purchase and sale of currencies on the foreign exchange market. Forex is the world’s largest and most liquid financial market on a daily, five-day-a-week basis, where currencies are exchanged. Evidence suggests that foreign exchange trading has been practised since the time of ancient civilisations. In contrast, contemporary foreign exchange trading did not originate until the 1970s, subsequent to the breakdown of the Bretton Woods system of fixed exchange rates, which ushered in the implementation of floating exchange rates. In the 1990s, electronic trading platforms and the internet revolutionised the foreign exchange market, expanding opportunities for individual merchants and making it more accessible. The forex market is currently the greatest financial market on a daily basis, involving the trading of trillions of dollars.
Table of Content
- What is Forex Market?
- How does the Forex Market Work?
- Forex Terminology
- Types of Forex Markets
- How to Start Trading Forex?
- How Forex Trades are Quoted?
- Pros of Trading Forex
- Cons of Trading Forex