What is Forex?

Admin · Newbie Joined: Sep 05, 2004 Posts: 3

The Foreign Exchange market, also referred to as the "Forex" or "FX" market, is the largest and most liquid market in the world, with a daily average turnover of well over US$1 trillion.

Foreign Exchange is the simultaneous buying of one currency and selling of another currency. Unlike other financial markets, the Forex market has no physical location or central exchange. It is an Over The Counter (OTC) market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network. Foreign exchange trading takes place in financial trading centers all over the world, creating one cohesive international market which is not centralised on an exchange. This makes it difficult for even governments to control the direction of the market. The unmatched liquidity and around-the-clock global activity make foreign exchange the ideal market for active traders.

A true 24-hour market, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.

There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. The other 95% is trading for profit, or speculation.

For speculators, the best trading opportunities are with the most commonly traded (and therefore most liquid) currencies, called "the Majors." Today, more than 85% of all daily transactions involve trading of the Majors, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar.

Each currency is assigned a three-letter code. For example, US dollar is coded - USD (United States Dollar), euro is coded EUR (EURo), Swiss Frank is coded CHF (Confederation Helvetica Franc), Japanese yen is coded JPY (JaPanese Yen), British pound is coded GBP (Great British Pound). Currency always shown in pairs. For example, GBPUSD (GBP-USD), USDJPY (USD-JPY), and as a rule, the first position occupied in currency pair is a more expensive currency.

The currency rates are usually expressed as five-digit numbers. For example, GBPUSD = 1.5510 means that 1 British pound is valued at 1.5510 US dollars (i.e. you are able to buy 1.5510 US dollar with 1 British pound). At the same time, USDJPY = 123.45 means that 1 US dollar is valued at 123.45 Japanese yens.

Goldking · Newbie Joined: Aug 15, 2005 Posts: 38

well.. thanks a lot ADMIN.I think your given information is very much useful to all those newbie who ever is new to the forex.Its very easy to understand and follow the practise. Very Happy

Kaabi · Newbie Joined: Aug 28, 2005 Posts: 96

Heh, I still don't completely understand this. If you wanted to aquire a lot of USD, and you had a lot of GBP, you'd wait for the GBP to go up high then trade it in so you can get a lot of USD. Is that how it works?

Kaabi · Newbie Joined: Aug 28, 2005 Posts: 96

But, I still have a lot to learn about Forex, and you're newbie tutorial was only the beginning in my long journey of learning Forex.

herbert · Newbie Joined: Oct 13, 2005 Posts: 20

Very valuable info.
Thanks Admin for this.

There are also a lot of useful information on this site posted on Forex Smile

Hopefully this will be my ticket into understanding how it works...

muso · Newbie Joined: Oct 19, 2006 Posts: 6

Thanks.

Good starting info for newbies...

petermason2000 · Newbie Joined: May 01, 2007 Posts: 29

Thanks. I have a basic understanding. But who makes money doing this. And how do they do it?

ACCER · Newbie Joined: May 05, 2007 Posts: 10

It seems to be a great deal like land speculation. You buy the land and hope for a quick increase in value. Then you hold it until just before the market busts and sell.

petermason2000 · Newbie Joined: May 01, 2007 Posts: 29

Yeah, but how do you know when all that stuff is supposed to happen? I don't have alot of disposable income, so I really can;t afford to lose doing this.

jasy · Newbie Joined: Oct 08, 2007 Posts: 2

please am in need for anyonez help as I have ma own forex account 4 months ago and I started to lose all d money am trading with. Please I need to have a good support, advice or a good strategy to follow to rescue ma account…
Can anyone help me know what shall I do?

jackz · Newbie Joined: Oct 20, 2007 Posts: 2

hello jas
I think I can help you in this as am using emoneypower's recommendations for a year now and its working good with me.
You can give it a try! contact them through their website www.emoneypower.com

wish you good luck! Smile

fxsweetie · Newbie Joined: Dec 26, 2007 Posts: 26

Good introduction to Forex! Smile

Thanks for the post..

But i still recommend to proper educate on how Forex really works.. Basics is really the most important thing to learn..

Google is always free to use for anyone who want to know a specific topic to learn..

www.babypips.com is a good source for anyone most especially newbies to find informations about Forex..

Forums like this is a big help.. www.forexfactory.com is good forum as well..

A book of Mark Douglas, trading in the zone is good.. and Trading Machine by Avi Frister as well.. There are lots out there.. You'll just have to exert effort to search about them..

I found a blog that i find useful about the Fastest way to Learn Forex -- Learn Trading .. I hope it would give some insights about Forex..

Happy trading everyone! Smile

hesslei · Newbie Joined: Nov 15, 2008 Posts: 2

The FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global forex and related markets is continuously growing. Traditional turnover was reported to be over US$ 3.2 trillion in April 2007 by the Bank for International Settlement.

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richemarks · Newbie Joined: Dec 16, 2008 Posts: 2

This forum is the best guide for the forex trading.And the importance of the forex trading and meaning of the forex trading are explained in this forum at very detailed and more informative method.So that every on can able to understand at easily.And the improtance of the forex trading should know everybody if they are intrested to earn more money in simple methos with low investment..

forex-wincom · Newbie Joined: Jan 17, 2009 Posts: 5

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