What is forex trading ? Is it similar to fx trading ? Forex or Foreign Exchange Market is the market where the transaction of buying and selling currencies all around the world takes place. It is similar to stock market trading. Forex is an OTC market (Over the Counter). Forex trading is now considered as the most liquid financial market that operates 24 hours nonstop. To understand how forex market works, first, you have to know the terminology used in the forex trading.
You will find that the currencies traded in forex are always in pairs, for example 1.4582 EUR/USD. It means that 1% increase in EUR/USD will take 100 pips increasing movement.
Business firms will generally take part into forex trading when they need to do the hedging. Banks and Financial, the other parties involved in forex trading are banks and financial institution. Retail Forex Brokers, these days, you can find many retail forex brokers in Internet. Through these retail brokers, individuals with small capital have the opportunity to join the forex trading and generate profit. People can make accounts in brokers’ platforms and start forex trading. Many online retail brokers have policies to allow margin trade in which for example, people with $1 account are allowed to trade up to $100. You can earn high profit as well as lose much in the online forex trading. Therefore, you must equipped yourself with sufficient currency trading knowledge, try to find and select the best online forex broker with an appropriate platform before you decide to jump in the forex trading market.