Global Market

What is the Forex ?

Forex is short for foreign currency: the transaction in which one currency is exchanged for another currency. This process can be done for a variety of reasons, including trade, tourism, and to facilitate international trade. The foreign exchange market (also known as Forex or FX) refers to the global market in which banks, institutions and investors trade and speculate in national currencies.



What is the Forex market?

The forex market is by far the largest and most liquid financial market in the world, with an estimated average daily turnover of more than $ 6.5 trillion, up from a sad $ 5 billion a few years ago. The forex market is open for buying and selling currencies 24 hours a day, five days a week and is used by banks, corporations, investment firms, hedge funds, and retailers. A key feature of the Forex market is that there is no central market or exchange, as all transactions are carried out electronically over computer networks. This is called an over-the-counter (OTC) market.

Understanding currency pairs

All transactions carried out in the forex market involve the buying and selling of two currencies at the same time. This "currency pair" consists of a base currency and a quote currency, where you sell one currency to buy another. The price of a pair is the amount of quoted currency it costs to buy one unit of the base currency. You can make a profit by correctly predicting the price movement of a currency pair. the most popular pairs traded on the forex market. These include the euro against the US dollar, the US dollar against the Japanese yen, and the British pound against the US dollar.

Main currency

The base currency is the first currency to appear in a currency pair and is always displayed on the left. This currency is bought or sold in exchange for the quoted currency and is always worth 1. Based on the example above, it would cost a trader $ 1.1918 to buy 1 EUR. Alternatively, a trader could sell 1 EUR for $ 1.1916. When you trade currencies, you are always buying one currency and selling another at the same time. Read More...

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