Not many people are interested in doing forex trading. This is because most of them think that forex trading is very risky. In this blog, I would try to explain the basics of forex, how forex market works, what is a forex managed account, how is forex hedging done. We will also see what various terms are used in forex trading including forex, currency pairs, forex signals, forex signal service, interbank market etc.
First of all, let us understand what the term ‘forex’ means. The term ‘forex’ is a short form of foreign exchange. This is nothing but the exchange of foreign currencies. Not many people know that forex market is the biggest trading market in the world with over one trillion dollars worth of currency being traded each day. This amount is much bigger than any stock market around the world. This market is used by smart traders for hedging and speculation of currencies and to take long term profit taking.
In older times, this market was not at all accessible to everyone. The forex market was available to big players only like big financial institutions and banks. But, with invention of the internet and availability of high speed and reliable internet connection, this market is open for even the retail traders who want to do forex trading from the comfort of their homes. This market is open 24 hours a day.
Let us just clarify a few things and misconceptions about forex trading. First of all forex trading is open to everyone provided he has a forex trading account with a registered broker. You don’t need to be an expert or an economist to start doing forex trading. You just need to under how forex trading works which will be covered in a different article so stay tuned.
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