Forex

Forex, or foreign exchange, refers to the buying or selling of one currency in exchange for another.

The forex market is the largest and most liquid financial market in the world, with a daily trading volume exceeding $6 trillion.

In contrast to other markets (such as the stock market), currency trading occurs at all times, day or night. The forex market operates 24 hours a day during the trading week, from late Sunday to Friday. It is a global network with major financial centres in London, New York, Tokyo, Sydney, Hong Kong, and others. As one centre closes, another opens, allowing for continuous trading.

Continuous operation ensures high liquidity, meaning there are always buyers and sellers in the market.

When you trade in the forex market, you buy or sell in currency pairs. For example, EUR/USD pair represents the exchange rate between the Euro and the US Dollar. When you trade a currency pair, you’re buying one currency and selling another.

In a forex pair, the first currency is called the base currency (currency you are buying or selling), and the second one is called the quote currency (currency you use to buy or sell the base currency).

So for EUR/USD pair, EUR (Euro) is the base currency while USD (US Dollar) is the quote currency.

Forex trading often involves leverage, which allows traders to control larger positions with a relatively small amount of capital. While leverage can amplify potential profits, it also increases the risk of losses.

Forex market can be highly volatile, with significant price fluctuations. The market reacts swiftly to news due to their high liquidity and 24-hour nature. Traders often use news and economic calendars to anticipate market movements and make informed trading decisions. Staying informed about relevant news and understanding its potential impact on the forex market is crucial for successful trading.