Introduction of Forex Trading and Its Market


Introduction of Forex Trading and Its Market

Definition

The term of Forex must be familiar enough to hear nowadays. But then, what is it actually? is that true that joining this trading gives you a chance to gain much profit in the short time? Well, here is the explanation. Forex actually stands for Foreign Exchange. Foreign here means the foreign currencies for sure. As an example, you may buy Euro and at the same time, you also sell USD. It means that you have exchanged your USD with Euro.

Slightly, it is not different from money exchange activities done in Money Changers. Although the main principles are basically the same, those are different particularly in term of functions. When you exchange the certain currency in money changer manually, it is purposed for having a certain currency to ease you to do transactions. This activity is commonly done when you want to go abroad. Well, trading Forex is more about investment done through online system with a purpose for profit. In other words, it is a kind of business activities and even profession. To smooth the process, there is also medium here, known as Forex broker.

Where can we find the profit anyway? Here is another difference between money exchange through Money Changer and through Forex. Since Money Changer is purely for helping the customers to ease their activities and transaction abroad, the customers may not exchange it again later. Meanwhile, Forex activities tend to let you keep the exchanged currency to be exchanged again later. You may buy Euro when its value is lower toward USD. Some weeks later, when you find this value is getting higher, you can sell or exchange it into USD which means there will be money excess here. The money excess or deviation between the second and first exchanges is the source of your profit anyway. Tips on How to Read Forex Quotes

Forex Market

This business is not done phisically anyway. all the selling and buying activities must be done through sites known as the trading platform. Different from the traditional one, Forex Market involves many realms particularly those businessmen. There are even multinational banks, companies, government, and institutions are involved here.

By remembering that it involves many people and big companies globally, it is reasonable to say that Forex market is really interesting and profitable. Why? Forex is indeed the biggest trading market with money velocity up to $4Trillion per day. More than that, it is also very liquid as you can buy and sell no matter how much it is.

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