What is the Forex market?

The foreign exchange market, also known as Forex, is a global and decentralized market where currencies are traded. Each of these currencies has a conversion rate, called the exchange rate.

Foreign exchange trading or the Forex market is the largest financial market in terms of regular turnover and liquidity. Foreign exchange trading is interesting and potentially very profitable. For currency traders have to correctly anticipate whether a specific currency will increase or decrease in value in order to make money. Currency brokers buy or sell a large amount of national currencies for customers or their employer. Currency brokers are financial services professionals. They work for major brokerage firms, investment banks, and hedge funds.

Forex is one of the most liquid markets, with a daily trading volume of $5 trillion. It is mainly used to facilitate trading and investment between countries. The Forex market is open 24 hours a day except for the weekend, opening in Sydney on Monday mornings and closing in New York on Friday afternoons. In the 1990s, this technology was recognised as a great opportunity and companies were created that allowed access to the foreign exchange market and leveraged accounts.

These companies became known as Forex brokers and it is thanks to them that nowadays anyone who has only 10 euros in their pocket and an online platform can test their skills in the market. All of this helped make currency trading increasingly known and used.

What is Forex Trading

To answer the question of what is Forex trading or Fx trading? Let's break down and define both terms:

  • The term trading is the activity by which one product is exchanged for another. It is possible to trade with an infinite number of instruments: forex, commodities, indices, stocks, cryptosystems, etc.
  • The term Forex refers to the market in which some currencies are exchanged for others, as well as other types of financial instruments.

So what is forex trading? Forex trading is an activity, or even a profession, through which currency pairs are bought and sold to speculate on the rise or fall of the price of those pairs.

Definition of a Forex Broker

Forex Broker: A person or company, which represents an intermediary and provides specialized services in the field of finance.

Thanks to forex brokers, you can gain access to any valuable asset. From them, you can also obtain advice and recommendations, training, assistance in document processing, support in operations, communication with banking companies and analytical information. Without a reliable forex broker, you cannot trade, so before you start trading, you should make sure you choose a suitable forex broker for your trading.

First of all, you should know that in Forex brokers are specialized companies, which provide traders with access to trading and analytical information, as well as leverage to simplify trading. In addition, brokers are true professionals in the field of finance and the foreign exchange market.

But brokers charge a certain fee for their services. It is deducted from each trader's trade that there is an insignificant increase in the spread. This fee is the profit for which the broker works.In this sense, it is completely logical that the main desire of the broker is to increase the client's profit, then his own profit will be higher. Therefore, often traders have been working with a trusted broker for years, the long term fruitful collaboration is beneficial for both parties.

Glossary

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