Learn Forex Trading Basics To Get Started With World’s Biggest Market

Foreign Exchange Trading (Forex Trading) is the worldâs
largest market where currencies are traded. This involves buying, selling and
currency exchange at the current currency prices. As per the volume of trading
involved, forex trading is by far the worldâs largest market. Every day over 4
trillion USD are exchanged in the forex market. The market however doesnât determine
the relative values of the traded currencies but instead it sets the current
market price of a currency as demanded by the other.

Forex Trading is
unique because;

When compared to other markets of fixed income
it has low margins of relative profits.

The market is available for 24 hours a day with
the exception of weekends. The major trading centers are located in New York,
London, Sidney, Hong Kong, Singapore, Frankfurt, Paris, Zurich and Tokyo.

Has numerous factors that affect the exchange
rates

Its geographical dispersion as itâs available
online.

uses leverage to enhance on loss and profit
margins with respect to account size and
most importantly,

The marketâs huge trading volume that represents
the largest asset class in the world thus leading to the highest liquidity.

Why is Forex Trading Popular?

Itâs not easy to become a forex trader, but being one offers
you the most amazing lifestyle regardless of any profession in the world. Its major
advantages include;

Ease of access- one can fund their trading
account with as little as 250 USD and begin trading on the same day.

Freedom of trade globally as business can be
done online.

Your Focus is only on few currency pairs instead
of thousands of stocks that can make one get lost.

Trading is commission free with overall cheap
transactions costs.

The trading markets volatility allows traders to
make profits regardless of market conditions with high probability market
opportunities.

LIQUIDITY.

Forex Trading market is the leading liquid financial market
(it has many bid & ask offers with easy executable trade at the desired
trade as it has multiple buyers and sellers) in the world. Main participants in
the Forex Trading are international banks, governments, currency speculators,
financial institutions and also individuals.

BASIC FOREX TRADING
TERM

Currency Rate.

This is the currency rate used against another currency
rate.

Bid Price.

The Bid Price is the amount of money you use to sell a
currency at i.e. the Forex Market is willing and able to pay you this price for
the particular sold currency.

Ask Price.

The Ask Price is the amount of money you use to buy a
currency at. It also means that itâs the price at which the Forex Market is
able to sell the currency to you.

Spreads.

A spread is the difference between the Bid Price and the Ask
Price.

Pip.

Percentage In Point commonly known as PIP or Point is same
as the minimum price increase of the Forex Trading Rate. In Forex Trading, the
most common PIP is 0.0001.

The most traded currencies are the USD, Euro, Japanese Yen,
Sterling Pound, Australian Dollar, and Swiss franc, Canadian Dollar, Mexican
Peso and the Chinese Yuan.