Forex Trading for Beginners – A Guide
Thanks to a variety of confusing terms and the potential for losing money whilst trading, many people are both unaware and unconcerned by the various incarnations of the stock market.
Forex for example, is a term which many people may not have heard of, and as a result they may not have experienced the variety of benefits which Forex trading could offer to them.
The key then is to examine what Forex is and just how accessible Forex trading for beginners really is.
What Is Forex?
At its’ most simplistic, Forex is the process of trading currencies from different countries against each other. Forex is so called to represent the Foreign Exchange.
To clarify, the foreign exchange is the “place” where the transactions take place and where currencies are traded. In order to trade in any market, it is essential to have the correct currency to operate within that market. Therefore, if a person wished to buy a bicycle from the UK they would have to firstly access the correct currency – in the form of pounds sterling.
The fact that there is no global currency and those wishing to trade or buy within a certain market have to use the correct currency for that locale is the reasons why the Forex market is seen as the largest market in the world.
Although it is often coupled with the stock exchange, the two are vastly different and in terms of size, the Forex Market dwarfs the stock market as well as other markets in both size and in terms of the amounts traded per day. A recent estimate showed that some US$2,000 billion is traded on an average day. This is a figure which most people would struggle to comprehend. Of course, this money does not physically exist and all trading takes place electronically via traders all over the world, rather than via one single exchange.
The Forex market is open on a 24 hour basis for five and a half days every week and currencies can be traded across almost every time zone in major financial centres such as London, New York, Tokyo, Frankfurt, Hong Kong, Singapore, Paris and Sydney
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