|What is Forex Trading?|
Forex (FoReignEXchange) or FX is the global market for currency trading i.e. it’s an exchange of one currency to other at an agreed price. As the world’s most widely traded market, Forex has an extensive network that connects financial institutions worldwide. Following are the key features of the Forex trading market:
OTC: It’s an OTC (over-the-counter) market i.e. it does not have one specific place where the trading happens physically, allowing you to trade from anywhere via your PC, tablet or mobile.
24/5 trading format: The Forex market is open around-the-clock 5 days a week (Sun 11 pm to Fri 11 am), allowing you to find investment opportunities no matter what time of the day or night it is.
Deep liquidity: High volumes ensure that the Forex market is extremely liquid, more so than any other market.
No price manipulation: This feature is crucial for several people as the possibility of price manipulations is excluded (owing to factors covered above) and the prices form from the supply and demand law.
|How Does The Forex Market Work?|
To understand how Forex trading works, imagine a currency exchange office. The mechanism of these two institutes is identical, with the sole difference being in the time and volume of the transactions execution.
On the Forex market, currency prices constantly fluctuate in value against each other. This way, you can earn in any given scenario, whether on a price growth or on its fall. When one currency becomes cheaper (when demand falls), the other currency always becomes more expensive (i.e. the demand grows). That leads us to the main definition on the Forex market, which is currency pair.
For example we have EUR/USD=1.3000 currency pair. That means we will have to pay 1.3 US dollar for 1 euro. To make it even simpler we can consider EUR as goods and USD as the price for commodity unit.
|Why Trade Fx Via xDirect?|
Forex trading has become significantly efficient with xDirect’s state-of-the-art Forex trading platforms. Make use of xDirect’s complementary demo account to learn how to trade Forex as well as know about the Forex trading basics. Also, find out which Forex strategies work more efficiently than the rest.