Forex Trading For Beginners – Introduction to Forex Market #1
Least volatile financial market in existence, the Foreign Market is one of the most dynamic, fast paced and exciting place to engage financial transactions – currency exchange. Here I am going to give you a concise introduction to the complex world of the Forex Market. It will be a step-by-step beginner guide to learn to trade Forex. As much as possible, I’ll make things simple and of course, fun because learning is supposed to be fun!
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Forex Market also known as Forex Exchange Market, FX Market, Currency Market, Foreign Exchange Currency Market, or Foreign Currency Market, is a place where currencies are traded. It has been a place for currency speculation of large financial institutions, corporations, banks, governments, investors, hedge funds and of course, traders. This speculation and exchanges of currencies are important in order for countries to thrive through foreign trades and businesses. For example, an exporter from the Philippines will sell corn and wheat to the U.S., the consumer country needs to pay the seller country in Philippine pesos. With this, the U.S. importer will need to exchange the equivalent value of U.S. dollars into Philippines pesos. The same principle goes for traveling as well.
The Forex Market is the largest, and most liquid financial market in the world. With an average traded value of around $2,000 billion per day, it somehow belittles other markets including the stock market. As of August 2012, the Bank of International Settlements (BIS), reported that the Forex Market traded beyond U.S. $4.9 trillion per day. It is open 24 hours a day, 5 times a week, with its world trading centers located in London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.
With the advent of technology and emergence of the internet, it is possible for average investors to engage in currency exchanges easily within a click of a mouse through online brokerage firms. One unique aspect to be noted is that there is no central marketplace for the Forex Market. Currency trading is conducted “Over the counter”, where in all transactions are made online between traders through out the world. Unlike stocks where in there is a central market with all orders processed, the Forex Market relies on the different quotations made by all major banks in differing prices, then the brokerage firms take all these quotes from these banks. The quotes are an approximate average of the exact price. Basically, the broker is the one making the market for you. When you buy a currency, the broker is the one selling it for you and not another trader.
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In order to be a successful currency trader, one has to understand the basics behind currency movements and fluctuations. It is definitely a place that could provide vast opportunities but also it could be a double-edge sword, which poses threats for large losses.
Bottom line is the goal of this step by step learn to trade Forex for Beginners tutorial is to lay down a good and firm foundation for traders, who are still new to the Forex Market. In the coming chapters of our Forex Trading Tutorial, I’ll be sharing the history of Forex Market, Terminologies, Basic Exchange Rates and many more! There are just plenty of things to learn from Best Forex Platform for Beginners to Best Forex Trading Strategies. All we need is time and a warm cup of coffee to be able to sit back, relax and enjoy every learning that we get from reading. Above all, happy investing and most importantly happy learning Forex Trading For Beginners!
- What is Forex Trading? – A Definition & Introduction by Nial Fuller. Retrieved April 02, 2013. http://www.learntotradethemarket.com/forex-university/introduction-what-is-forex-trading
- Forex Tutorial: Introduction to Currency Trading. Retrieved April 02, 2013. http://www.investopedia.com/university/forexmarket/
FOREX TRADING FOR BEGINNERS:
- Introduction to Forex Market
- History Of Forex Market
- Common Used Forex Terms