The foreign currency exchange market, Forex is a global trading market concerning individual country’s currencies, products, and portfolios. Centralized banks, investment companies, and large conglomerates trade trillions of dollars daily in the foreign currency market betting that their purchase will earn them money. Similar to an individual country stock market, Forex is just trading on a much bigger scale and is done globally instead of within the individual country.
Because currency rates change every day and go up and down, the value of the currency never stays the same. You’ll notice in the United States, that our dollar rate changes against the current market some times a minute-by-minute basis by at least a few points. This is a part of the foreign currency exchange market. Because it’s in a constant state of change the market moves very quickly and money is made minute by minute. Pouring tons of money into Forex is extremely dangerous because of market fluctuation.
You’ll find foreign currency exchange is happening with the British pound, the Australian dollar, the Euro, the Japanese Yen, the Swiss Franc and the US dollar. These are some of the major money markets in trading, and millions of dollars in currencies are traded throughout these countries every day. Basically, you trade your money and for another currency, and then trad it back into your country’s currency or another, betting on the fact that the current sea you bought will climb against your own personal dollar
Because markets open, and close almost every hour of the day, Forex is a 24-hour market almost 7 days a week. This means that trades in foreign currency is happening minute-by-minute and hour-by-hour and the rates rise and fall. The trading in one country often overlaps the hours of operation in another and each foreign currencies market value affects the other and that’s what speculation in Forex is all about.
Each country’s currency has its own initial code. A 3 letter code that is linked to their own currency and is used to indicate individual currencies without mistakes. You’ll need to have a thorough understanding of this lettering and coding to understanding whose rising and who’s falling. The US code, USD,, the British pounds sterling, GBP, the Euro, EUR are some examples
Before jumping into Forex trading of any type, you’ll need to be thoroughly conversant or at least hire a broker that is knowledgeable about trading practices in foreign currency speculation. Things happen very fast and on a global level, huge amounts of money are traded every day and getting caught up with something you’re not familiar with can make or break you very quickly. Thoroughly research your broker, make sure they have a good track record and are on the up and up and then enjoy trading in Forex.