What is Forex?
Forex, or foreign exchange, or simply fx, is the market where currencies are bought and sold. It is among the biggest markets on the planet.
There are many members who just want to exchange a particular foreign currency with their own. For example, there are many MNCs that pay salaries and miscellaneous expenses in various countries. Thus they need to exchange currencies to deal easily in every country.
But the large part of forex market consists of traders who study the movements in specific currencies. They predict the states of currencies and trade in them. This is similar to the stock market where traders study the movements of stocks, but unlike stock market, there is no inside information of foreign exchange. Exchange rates cannot be ‘leaked’ because they aren’t being controlled by a single organization. This is why forex is completely fair.
Currencies aren’t traded individually. They always operate in pairs. Thus the individual product is a pair of currencies, written as xxx/yyy. Here xxx and yyy are currencies, for example, EUR/USD.
Foreign exchange market is open 24 hours, and if a session ends at any part in the world, another session will start at some other place.
While forex trading can make anyone rich in a few months’ time, it can also result in a heavy loss. It is always advisable to learn the forex tips and tricks before entering this market. If you are planning to join the forex trading line, you must find a good mentor who can teach you the rules of forex before you dive into it.