What is Forex

We had heard a lot of forex trading, but we don't have enough time to know what is forex exactly, because it have a very big books and courses to read.

Forex (Foreign exchange market) is an international money market where free purchase and sale of national currencies are conducted. Forex as we know it today was formed in 1970s after the world's leading countries switched from fixed to floating rates. Forex is a worldwide market for buying and selling currencies. Forex is short for foreign exchange, so when you mention "forex market", you are referring to the foreign exchange market.

Forex traders are represented by thousands of trading institutions such as international banks, central banks of different countries and commercial brokers for all types of foreign currencies. Forex trading or currency trading is always done in currency pairs. Forex advantages 24 hour trading, 5 days a week with non-stop access to global forex dealers.

Forex currency trading for beginners should always include a discussion of the effects of trade imbalances on the price of currencies in foreign exchange trading. The average of forex day trading sales is $ 4 trillion, with constantly increasing volumes of funds for forex conversion operations. As at any stock exchange market, a trade on forex occurs according to the demand and the proposal of a certain instrument. Trading the forex allows the trader to profit from both rising and falling currency prices and this market is not subject to recessions.

In the Forex Market, the money is bought and sold freely; this is the exchange of one currency over another. Foreign exchange trading views a budget surplus as a favorable factor in the worth of a currency while a deficit can lower the value of a currency when trading forex. As mentioned above, the advancement of technology has made forex trading available through the web. The forex market gives traders the ability to leverage their returns by up to 400:1 times the capital in their trading account. The Foreign Exchange Market, also referred as Forex market or FX market, was established between 1971 and 1973, when various central banks around the world introduced a free exchange rate regime, letting the currencies fluctuate driven by the market. Unlike other financial markets, the Forex market has no physical location, no central exchange.

Trading was done by phone orders almost exclusively at one time and they still are today but not as extensively. This is called "trading in pairs", for example: the US dollar against the Japanese yen, or the English pound against the yen, and so on. Forex traders are represented by thousands of trading institutions such as international banks, central banks of different countries and commercial brokers for all types of foreign currencies. One great advantage of trading currencies is you can profit in up and down markets, it is just acceptable to trade to the down side “Short” as it is to the upside “Long”.

Basically, it is a very large market where only currencies are exchanged each time transactions are carried out in Forex, a currency is bought and one is sold at the same time.

When quoting currency pairs, the first currency is known as the base currency and the second as the quote, if you think the US Dollar is going to be stronger than the Japanese Yen, you would buy the base (USD) Hoping that it would rise and sell the USD when you wanted to exit the trade. On the market, a buyer of any particular currency pair is basically indicating their confidence in the economy of that particular country.