An overview of Forex trading?
The foreign currency exchange market – aka Forex market – is the world’s most liquid, with an average daily turnover of almost $4 trillion. The market is comprised of banks, businesses, governments, investors and traders, who exchange international currencies based on their own speculation with regard to how one currency will perform against another.
Give the time differences from one country to the next, Forex trading continues around the world on a 24-hour basis from Monday to Friday. However, the most critical Forex trading hubs are considered to be Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris, London and New York.
What make the Forex market unique is the fact that is lacks a central marketplace and asset prices can vary significantly. Quite often, the value one bank quotes for any given currency may be very different from the value quoted for the same currency by another. Traders and investors generally work with brokers, which collate extensive information from a variety of sources to produce accurate average prices to work with. For traders at levels, brokers offer the fastest, easiest and safest way of accessing the Forex trading market.
The entire market is guilt on speculation, with regard to how those involved believe currencies will perform in the future. For example, you may believe that the GBP will fall in value against the USD over the next 24 hours, meaning you can buy the USD at its current value and sell it later when it has gained value over the GBP. If your prediction is correct, you make a profit. By contrast, an incorrect decision will lead to a loss. Those approaching the Forex market for the first time are generally advised to only every trade with money they can afford to lose, given the inevitable risks and no guaranteed of success.