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FOREX MARKET

Introduction to Forex Trading
It can be an enormous task to understand the fundamentals of forex trading and how it works, especially if you are a newbie and, not acquainted with the currencies of the world. You need to educate yourself primarily on its fundamentals prior to the advent of your forex trading, otherwise you will be at the losing end when comes to forex trading. In this respect, it is hope that whatever information published in this website will be of immense value and assistance to all who seek success as a forex trader.

Forex is acronym of foreign exchange and it is also popularly referred to as FX in the financial markets. Forex trading is all about exchanging or trading currencies from different countries against each other, and in principle, the exchange rate of a currency against that of the other currencies is a reflection of the status of that country’s economy, compared to the other countries’ economies.

The forex market is comparatively new, having started in the early 1970s after the United States discontinued the gold standard and national currencies begun to fluctuate broadly. For nearly 30 years prior to that, most nations came to a mutual understanding that their currency values should remain stable in relation to the US dollar, making the forex market unnecessary. Since that was not the case anymore, banks and financial institutions immediately realized that profits could be achieved in “buying” any currency when it was devalued and “selling” it after it appreciated, just identical to any other commodity.

Presently, forex trading has no centralized financial market or location for the trading of currencies. Its world-wide financial centers function as supports for trading between all the different types of buyers and sellers around the clock, except on weekends. The forex market regulates the relative values of different currencies. The latest triennial survey on the average daily turnover in global foreign exchange market by the Bank for International Settlements (BIS) is currently at 5.3 trillion dollars up from 4 trillion dollars in 2010, a growth of approximately 32.5%. The survey which is conducted every three years also shows that the United Kingdom has strengthened its hold on the forex market, while USD/JPY has seen a strong surge in the trading activity.

currency-trading-tablet-150x150With the advancement of the internet technology, it is now possible for people to trade in the forex market freely. The forex market has now opened up its doors to regular people or individual traders and brokers to trade in the forex market, whereas in the past with its strict sanctions and policies, only multinational companies, banks and financial institutions and hedge funds were allowed to trade. It is overwhelmingly dominated by them as it requires huge amounts of investment capital to start trading in the financial market. In fact, individual traders account to only nearly 2 per cent of the forex market. Nonetheless, a lot of people still try their hands at it, but with varying degrees of success.

Staying ahead in the forex market has never been an easy task for beginners. In the first place, sheer knowledge needed is daunting and, although you are aware that the forex market is truly a gold mine waiting to be mined, you would probably also know that you do not possess the know-how to take advantage of it! On one side, having easy access to the forex market means that you will be able to experience it a lot faster, and instantly start trading. But on the other side, this ease of access is the main reason that caused so many beginners or newbies to rush into the market while they are still unprepared.

Always remember that you should get the right information and advice before you enter a trade in order to achieve success as an investor.

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