The foreign exchange market (Forex) has no single location or central stock exchange, though it is the largest financial market in the world. Its size reaches three times the size of the stock and futures markets combined and works through an electronic network that includes banks, companies and investors.
Forex trading involves the simultaneous purchase of one currency in exchange for the sale of another currency and exchanged in the form of pairs, in other words that one of the currencies is exchanged against the other currency. The main currencies are:
USD – American dollar
EUR – the euro
JPY – Japanese Yen
GBP – Pound Sterling
CHF – Swiss Franc
CAD – Canadian dollar
AUD – Australian dollar
There are two types of investors involved in the Forex market. The first type is the hedge investor who engages in international trade and uses the Forex market to protect his interests from currency fluctuations. The second type of investor is speculators who only invest in currencies for profit.
Currency rates fluctuate due to a variety of economic and political factors. The main factors include:
There are many other reasons that increase investor interest in Forex trading. Some of these main reasons include:
There are no deal sizes
Low transaction costs
Low margin, high leverage
Twenty-four hour market
The ability to access trade through online trading platforms
It provides a good opportunity to trade permanently, unlike the Forex market is never bullish or bearish.
No single entity can control the market
There are no internal trades.
To start trading the Forex market, the investor will only need a personal computer, high-speed internet access, and a currency trading account. A mini account can be opened for an amount not to exceed $ 100.