The forex market or the so-called Forex is one of the most important financial markets for currency trading through the Internet in the world.
It is a market where one currency is exchanged for another by buying and selling for profit.
Its liquidity exceeds the liquidity of financial markets with a volume of 5 trillion US dollars per day.
The main reason for the magnitude of the Forex market and making it the leader of other financial markets is that the market operates 24 hours a day, 5 days a week.
Trading starts from New Zealand, Australia, Asia, and Europe and ends in the USA.
Many traders from all over the world see it as an additional income and rely on it as a standalone business.
They participate in the Forex market through brokerage firms and trade via a trading platform from their home computer.
Bodies that are primarily involved in the Forex market
- Currency market activity depends on companies that invest in currency trading to deal with entities in other countries.
- Companies use the currency market to buy and sell currencies.
- It also uses them to provide some services to other countries.
Investment companies that manage their clients’ portfolios rely on the foreign exchange market to facilitate foreign exchange trading.
Governments and central banks
- The central bank of any country is responsible for increasing or decreasing the value of the currency because it controls interest rates.
- The central bank’s position in any country is important in the foreign exchange market.
- Countries must take foreign currency reserves when they want to stabilize and stabilize the market.
By exchanging currency while traveling abroad, individuals participate in the currency trading market.
This is done by the bank or when they arrive at the airport.
There are many currencies in the world and each currency is denoted by 3 letters.
The first two letters represent the name of the currency country, and the third letter represents the name of the currency.
Such as USD is the official currency used in the United States.
Here, US is an abbreviation for the United States of America, and the letter D represents the first letter of the word dollar.
The currency market evaluates currency pairs through these symbols.
These are the currencies on which the Forex trading market relies.
Countries using these currencies are economically prosperous.
These currencies are very popular in the forex market because of their widespread, attracting traders from all over the world.
Example of the major currency pairs:
These are the currencies used by countries with a higher employment rate than in other countries.
They have an immigration system for scientists and experts from developed countries.
The secondary currency pairs are based on the trading of the major currencies except for the US dollar.
Example of secondary currency pairs:
- CHFJPY Swiss Franc vs Japanese Yen.
Currencies that increase the activity of any country with high growth rates.
But it has some drawbacks:
– Liquidity is weak in Forex and international banks.
– Forex traders were exposed to high risk.
This is due to the large difference in the spread index, and the difficulty of predicting the indicators of the international economy.
How do you read currency pairs?
- The base currency is the currency written on the left in English.
- The secondary currency is the currency written on the right.
- The exchange rate for each pair is the value paid by the secondary currency to buy a unit of the base currency.
How to profit from trading in the Forex market?
Trade the Forex market like any trade except the possibility of profit when the price falls.
This is if you select the appropriate treatment.
When buying a quantity of EUR / USD currency pair.
There is a rise in the price, the trader will make a profit here.
When the price falls, the trader will record a loss.
But if the trader sells a certain amount of the EUR / USD pair and the price falls, it will make a profit.
In case the price rises here the trader will record a loss.
What you need to succeed in the Forex market
Select a licensed currency trading company.
- You can open a currency trading account, deposit the amount you want to trade and start trading online.
- Learn to trade currencies by learning technical analysis and risk management, and psychological training.
- Profit from price movements.