Hello
readers, today I am going to publish something other than my usual
topics. And from now on I will try to publish them with regular
interval. We all know stock markets are crashing. So it is time we move
on to something more beneficial. It is called Forex trading. Where you
can get a sustainable regular profit if you have a good strategy. I am
going to write detailed tutorial about forex trading in the coming days.
In these tutorial parts I will write about what is forex, how to trade
forex, and various trading strategies you can apply in your trading.
Today we will start with the basics of forex.
what is forex?
Forex is the foreign exchange market. The foreign exchange market is a
virtual market where investors buy and sell currencies for other
currencies.
So what is forex trading?
Forex Trading is trading currencies from different countries against each other.
For
example, in Europe the currency in circulation is called the Euro (EUR)
and in the United States the currency in circulation is called the US
Dollar (USD). An example of a forex trade is to buy the Euro while
simultaneously selling US Dollar.
So how can you make profits?
So
you have read what is forex and forex trading. Now you may have
question, ok i understand what forex is but how can I make profit from
it? The simple answer is currency speculation.
For
example, we all know Bangladesh taka or BDT is constantly rising
against United States Dollar or USD. The current price of 1 USD is
75.8000 BDT. Where 1 year ago it was 69-70 BDT. So you see how USD price
is rising against BDT. Now for example if you had bought 100 USD for
7000 BDT last year, you could have had 7580 BDT now. This is just an
example. In forex trading you will work with pairs like EUR/USD,
GBP/USD, USD/JPY etc which fluctuates much more and you have plenty of
opportunity to make profit.
Just like there are small investors and large investors, there are small currencies and large currencies. In general, currencies are “large” or “small” depending on how popular they are with investors and traders in the foreign exchange market.
The majors are the seven currency pairs that dominate the market. At present, the majors are found in 85% of all currency trades, making them very important to the foreign exchange market.
These seven majors are:
EUR/USD – Euro vs. US Dollar
USD/JPY – US Dollar vs. Japanese Yen
GBP/USD – Great British Pounds vs. US Dollar
AUD/USD – Australian Dollar vs. US Dollar
USD/CHF – US Dollar vs. Swiss Frank
USD/CAD – US Dollar vs. Canadian Dollar
NZD/USD – New Zealand Dollar vs. US Dollar
Size of Forex Market:
The foreign exchange market is the largest market by total nominal value of all things traded. Each day, some $4 trillion in value trades hands between governments, institutional investors, corporations, and individual traders who trade world currencies between themselves.
Other markets find it hard to compete against the foreign exchange market’s massive size. The chart below shows the total value of the foreign exchange market versus several other financial markets:
Ok that is for today. In the next lesson I will write about the various sessions of Forex market.
1 comment:
Thank you for your useful post. go on.
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