This information so far clears the ambiguity of Forex to me. I hope you will like it like I do. www.cmsfx.com provides the most helpful website that provides specific information about forex trading.
the basics of forex trading:
Forex is stands for Foreign Exchange, it is probably the largest financial market in the world. With an estimated $ 1500000000000 currency traded daily, Forex provides income to millions of traders and major banks worldwide. The market volume is so large that it will conduct the New York Stock Exchange, with a daily average of less than $ 20000000000, almost three months to reach the value traded in one day in the forex market.
Forex, is not like other financial markets, which are tied to a real stock market. Forex is a counter (OTC) or off-exchange market.
The Foreign Exchange Market is the device or system by which currencies are valued relative to one another and exchanged.An individual or institution buys one currency and sells another in a simultaneous transaction. Currency trading always occurs in pairs where one currency is sold for another and is represented in the following notation: EUR/USD or CHF/YEN. The exchange rate is determined through the interaction of market forces dealing with supply and demand.
To understand this, I tried to illustrate it. For instance the value of 1 euro in dollar is 50. I have 1 euro and sold it to another trader for 50 dollars, but because there was a rise in the United States' Economy, the exchange rate of dollar to euro became 50 to 3, then I sold the same to another trader. In that case earned 3 euros.
the basics of forex trading:
Forex is stands for Foreign Exchange, it is probably the largest financial market in the world. With an estimated $ 1500000000000 currency traded daily, Forex provides income to millions of traders and major banks worldwide. The market volume is so large that it will conduct the New York Stock Exchange, with a daily average of less than $ 20000000000, almost three months to reach the value traded in one day in the forex market.
Forex, is not like other financial markets, which are tied to a real stock market. Forex is a counter (OTC) or off-exchange market.
The Foreign Exchange Market is the device or system by which currencies are valued relative to one another and exchanged.An individual or institution buys one currency and sells another in a simultaneous transaction. Currency trading always occurs in pairs where one currency is sold for another and is represented in the following notation: EUR/USD or CHF/YEN. The exchange rate is determined through the interaction of market forces dealing with supply and demand.
To understand this, I tried to illustrate it. For instance the value of 1 euro in dollar is 50. I have 1 euro and sold it to another trader for 50 dollars, but because there was a rise in the United States' Economy, the exchange rate of dollar to euro became 50 to 3, then I sold the same to another trader. In that case earned 3 euros.
Here the Traders generate profits, or losses, by speculating, determining or foreseeing whether or not a currency will increase or decrease in value by comparing it to another currency. A trader would buy the currency which is anticipated to gain in value, or sell the currency which is anticipated to lose value against another currency. Sounds like gambling right!? But it isn't. The value of a currency, in the simplest explanation, is a reflection of the condition of that country's economy with respect to other major economies. The Forex market does not rely on any one particular economy. Whether or not an economy is flourishing or falling into a recession, a trader can earn money by either buying or selling the currency. Reactive trading is the purchasing or selling of currencies in response to economic or political events, while speculative trading is based on a trader anticipating events.
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