Is forex trading right for you?
Is forex trading right for you? Forex is an abbreviation of the term Foreign Exchange Market, which means the foreign exchange market and is also symbolized by the abbreviation FX, and forex is one of the most famous financial markets, and it is a huge financial market in which the currencies of countries are traded among millions of investors, banks and investment funds for several purposes, the most important of which is benefiting from the change in currency exchange rates and achieving Profit by buying and selling.
Forex trading has flourished due to technological development and the spread of the Internet and modern means of communication, and the forex market is a decentralized market and has no geographical boundaries where it is traded using the OTC system or trading outside the platform.
How much is the trading volume in the forex market?
The forex market is the largest financial market in the world in terms of liquidity and trading volume, reaching $6.6 trillion per day in April 2019, equivalent to 25 trillion Saudi riyals per day. Forex cannot be compared to any other financial market in terms of liquidity, for example, the New York Stock Exchange NYSE, the world’s largest stock market, has a daily turnover of $70 billion.
What are the advantages of the forex market?
Huge liquidity and high trading volume in forex.
Forex trading is open 24 hours 5 days a week.
Forex trading is done in a decentralized way – OTC.
Ease of following the forex market and limiting currency news.
The possibility of making a profit during the rise or fall of currencies.
The possibility of trading in small amounts thanks to the financial leverage.
Ease of opening a real account in forex.
When can forex be traded? Forex market working hours and trading hours
The forex market is a decentralized market that operates through various means of communication around the world without a specific geographical location as a center for trading, as the market operates 24 hours a day and for five days a week from the beginning of trading on Monday to its end on Friday, and the market closes on Saturday and Sunday as an international weekend.
The forex market trades in four main periods: the American, European, Asian, and Australian trading period, so trading does not stop throughout the day as these periods overlap each other and continue to the next day.
What currencies are there in the forex market? What is the meaning of currency pairs?
What currencies are traded in forex? As we explained earlier, forex is the foreign exchange market, so traders trade on the currencies of countries and the most famous of these currencies are the currencies of major countries, which have economic weight, and often attention is paid to 8 currencies as they are considered the most important and highest traded among the currencies of the world, namely:
The US dollar is the currency of the United States of America.
EUR – the currency of the European Union countries.
GBP – the currency of Britain.
JPY – The currency of Japan.
Australian dollar AUD – the currency of Australia.
New Zealand dollar NZD – the currency of New Zealand.
Canadian dollar CAD – the currency of Canada.
Swiss Franc CHF – the currency of Switzerland.
How to trade pairs system in the forex market?
Trading in the forex market takes place in the pairs system where all two currencies are combined together in one pair to trade one currency against the other. It means selling one currency in exchange for buying another at the same time, meaning that the currency pair contains two currencies, a base currency, and a counter currency, for each pair of Currency pairs An exchange rate, expressing what is required to be paid in the base currency to obtain one unit of the counter currency.