What is Forex?

Forex is a conjunction of primarily two words, foreign and exchange. It is a global business of exchange of foreign currencies between the two countries, governments of the countries and gigantic financial organizations. Forex is bought in pairs, for instance, Dollar/Yen. The exchange works round the clock 24 hours a day and 365 days a year, which means that the trading continues on the global level in part or the other. Pip is the smallest unit or increment in which the currencies are exchanged; dollar is the pivotal bench mark currency for contemplating the exact evaluation of other currencies traded on the foreign exchange market as 80% of the trade done is against U.S. dollars. Though with the advent of World Wide Web the complex business of forex has reached the desktops of masses, still there is a general trend of employing a broker to articulate all your financial transactions on the foreign exchange.

Why Forex Trading?

  • The foreign exchange market is a profitable, convenient way to make money. Forex or foreign exchange trading involves buying and selling different currencies. Forex trading is a convenient form of investment that can also earn large profits. It is very simple to begin Forex trading, and the foreign exchange market is now one of the largest financial markets in the world.
  • More than 1.5 trillion US dollars are traded on the foreign exchange market every day. Over the last thirty years, the foreign exchange market has grown into the largest financial market in the world. This makes it an excellent choice for trading and investing.
  • Until recently, it was not convenient for individual investors to trade on the foreign exchange market. The minimum sizes for deals were too high and the financial requirements for Forex trades were far too rigid. These deterrents have now been removed, and Forex trading has become one of the best forms of investment and trading.
  • There are many reasons to choose Forex trading. One reason why the foreign exchange markets are so popular is that trading is possible 24 hours a day. This will ensure that wherever you are in the world, and whatever your schedule is, you can find a convenient time to trade on the Forex market. The markets are open between 5 pm Eastern Time on Sunday and 4.30 pm Eastern Time on a Friday. Having a market that is open 24 hours a day is not only convenient for trading, but it allows trader to react instantly to any breaking news. There is no need to wait for the market to open in the morning before acting.
  • Foreign exchange trading is very convenient. Most of the currency transactions that take place involve transfers between the seven major currency pair. This helps to keep the prices of these currencies stable and trends in the market smooth. There is also a very high level of liquidity for Forex trading, which can be very useful for investors.
  • Forex trading also attracts investors because there is no need to pay commission on trades. This means that all of the profits that are made on foreign exchange trades will be kept by the investor. The zero commission on Forex trading is particularly useful for investors who want to trade frequently.
  • Forex trading also offers a very stable trading environment in which to operate. It is possible to make profits whether the market is rising or falling because there are always differences in the way that different currencies from around the world are behaving.