Forex

Forex





Forex is also very heavily traded, the volume amount traded in forex in just 1 day is about $5.1 Trillion.

The main currencies traded are what are known as the Majors:

US Dollar (USD)

Euro (EUR)

Japanese Yen (JPY)

British Pound (GBP)

Swiss France (CHF)

Australian Dollar (AUD)

Canadian Dollar (CAD)

New Zealand Dollar (NZD)

Some of the other commonly traded currencies known as Emerging Currencies are:

South African Rand (ZAR)

Turkish Lira (TRY)

Czech Koruna (CZK)

Polish Zloty (PLN)

Russian Rubble (RUB)

Chinese Yuan (CNH)

Hong Kong Dollar (HKD)

Singapore Dollar (SGD)

 

Trading forex is a means to speculate on the relative values of currencies by simultaneously purchasing a currency and selling of another with aim of profiting from fluctuations in the exchange rate.

In Forex, currencies are quoted in pairs, for Example:

EUR/USD (meaning The Euro being a base currency paired against the counter currency the US Dollar)

GBP/USD (meaning The British Pound being a base currency paired against the counter currency the US Dollar)

For instance the EUR/USD, at the time of writing is 1.18

This means one Euro buys 1.19 Dollars and it takes 1.19 Dollars to buy one Euro

The GBP/USD is at this time 1.34

This mean one British Pound buys 1.34 US Dollars and 1.34 Dollars buys one British Pound

Being the most traded market in the world, means it’s a highly liquid and dynamic market.

A high market liquidity means that prices can change rapidly in a response to news and/or short-term events,  this can create a multiple of trading opportunities for forex traders.

Buying / Long

When trading forex, if in your analysis you believe the base currency (Euro) will strengthen against the counter currency (USD), or the counter currency will weaken against the base currency you may decide to buy/go long a currency pair and for every pip the Euro rises against the Dollar you’ll make a profit.

Forex going long

Selling / Short

If however in your analysis you believe the base currency (Euro) will weaken against the counter currency (USD), or the counter currency will strengthen against the base currency you may decide to sell/go short a currency pair and for every pip the Euro falls against the Dollar you’ll make a profit.

Forex going short

Margin and Leverage is very common within the trading industry, and it’s important that all traders from newbies to the experienced have an understanding of how they work. – please see our Margin and Leverage page.

*Please Note, Binary Options and Forex trading can carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose




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