Meaning of the “FOREX”:
The word Forex stands for “Foreign Exchange Market”. It is a global market for trading currencies that includes all kinds of buying, selling, and exchanging currencies according to current market price. It is a unique market because of the trading volume is so huge which represents the largest assets with high liquidity. The continuous operations of forex are 24 hours a day without Sunday. It depends on the geographical dispersion and the exchange rates affected by various factors.
The way of Forex Trading:
It is similar to the stock trading. In stock trading the stock trader will buy the stick if he thinks that the price of the share will go up in future and then he will sell the share and will make profit. In the forex trading instead of buying shares from companies the forex traders will buy the currencies and if the exchange rate grows up they will exchange the currencies with other currencies to make profit.
Explanation of exchange rate:
Forex trading is fully depends on the exchange rate. So if you want to be a forex trader than you have to understand the exchange rate. Exchange rate means the relative values of different currencies. It is very rare that you will get same value of the two currencies and two currencies will bear the same relative value for the period of time. In forex trading the exchange rate of the currencies always keep changing.
The reasons of changing the exchange rate:
The forex trading is open for everyone. According to the supply and demand the currency rate fluctuate in the forex trading. If the supply decrease and the demand increase the rate of currency will rise, but if the supply increase and the demand decrease than the price will decrease. The big advantage of the forex trading is that you can buy or sell the currency pair at any time. For example, you can buy the Dollar by selling the Euro.
Why Forex trading is better:
As it said that forex never sleep. You can trade the currencies at any time of the day because the trading goes around during different counties time. Here you will get the best leverage up to 50:1. You can trade here any time because it is typically easy to get into and out, even if you trade in large size subject to available liquidity.