Forex market, also known as foreign exchange market or FX, is a market where currencies are traded. It’s the largest and the most liquid financial world market that is open 24 hours a day, 5 days a week. For comparison, the daily turnover of trades on the New York Stock Exchange is about 169 billion dollars, while in the Forex market it is about 5 trillion!
How Forex works?
A Contract for Difference (CFD) on currency pairs is a financial instrument that allows traders to invest in an asset class, namely currency pairs, without actually owning the underlying asset. CFD offer traders the opportunity to profit from price movements – rising or falling. It is calculated as the movement of an asset between entry and exit in a trade, calculating only the price change without taking into account the underlying value of the asset. CFD on currency pairs works like a contract between two parties (buyer and seller). It states that the seller will pay the buyer the difference between the present value of the asset and its value on the “contract term”. If the difference is negative, the buyer pays instead of the seller.
What are Forex trading hours?
Forex is open 24 hours a day, 5 days a week, and currencies are traded around the world among major financial centers. The market opens on Sunday at 22:00 GMT and closes on Friday at 22:00 GMT. The specific hours of each center are:
Sydney – 22:00 – 7:00 GMT
Tokyo – 12:00 – 9:00 GMT
London – 8:00 am – 5:00 pm GMT
New York – 13:00 – 22:00 GMT
How expensive is Forex trading?
It depends on how you are going to trade, whether you are using leverage and what kind of capital you are planning to risk. You can start by investing $ 50 or $ 50,000 – there is no limit on the amount. However, you should remember that increasing leverage also increases the level of risk. Ultimately, trading comes down to a trader’s risk tolerance and risk management. Skilled traders can minimize risk and maximize profits through careful analysis, developing an effective trading strategy, and prudent money management.
Who is involved in Forex trading?
There are several major players in the Forex market including central banks, commercial banks, and investment banks. This is called the interbank market because they constantly interact with each other on their own behalf or on behalf of their customers. However, there are other participants in the foreign exchange market, which also include large multinational corporations, global funds managers, registered dealers, international brokers, futures and options traders, and individual investors.
The most profitable currency rates are always on the exchange