The Forex market, short for “Foreign Exchange,” is the largest and most liquid financial market globally, where currencies are traded. Forex traders aim to profit from the difference between buying and selling prices of currencies. Known as FX or Forex trading, it is one of the fastest-paced and most dynamic markets in the world. Historically, this market was dominated by large financial institutions, central banks, hedge funds, and wealthy individuals.
However, the advent of the internet has made Forex trading accessible to almost anyone. Today, investors can trade currencies from the comfort of their homes with just a few clicks. Currency, much like language, varies across countries. To conduct international business or purchase goods abroad, you need to use the local currency. For example, you wouldn’t use Swiss Francs to pay for a meal in Marrakech. This is where Forex trading plays a crucial role. Global currencies are traded on the Forex market, which surpasses $4.9 trillion in daily trading volume, dwarfing the average $2,000 billion traded daily in the global stock market. Unlike other markets, Forex trading has no centralized exchange.
Currency trading occurs electronically over-the-counter through global computer networks connecting individual traders. The five major Forex trading hubs are Frankfurt, Hong Kong, London, New York, and Tokyo. The Forex market operates 24 hours a day, five and a half days a week, spanning nearly every time zone. This constant activity results in a market that is always in flux, with prices changing continuously. Currencies are traded in pairs, where one currency is used to buy another. These pairs simplify comparisons and help understand the relative value of currencies. The EUR/USD pair is one of the most popular. In currency pairs, the first currency is the base, and the second is the counter currency. For instance, in the EUR/USD pair, you use USD to buy EUR. When buying a pair, you take a 'long position,' and when selling, you take a 'short position.'
Understanding the current market conditions of your chosen currency is essential. For example, if you anticipate a decline in Bitcoin value relative to the EUR, this could influence your trading decisions. We provide up-to-date information on popular currency pairs, including Bitcoin as part of our currency index. The most commonly traded pairs are EUR/USD, USD/JPY, GBP/USD, and USD/CHF, followed by USD/CAD, AUD/USD, and NZD/USD. Other pairs are simply combinations of these major currencies.
