Forex has become one of the most profitable online businesses; It’s gaining much popularity nowadays due to its numerous benefits and opportunities for profits and personal development.
Anyone who is tech-savvy is aware of the fact that Forex trading can be a very profitable business. Therefore, it’s no surprise that every day we are witnessing more and more Forex traders who are eager to earn huge profits with Forex one day.
For those who have just started their trading career, we have prepared all the crucial information about Forex in general. Learning fundamentals will help you understand how Forex functions, and you’ll quickly realize what is necessary for you to make your Forex dream come true!
The meaning of Forex and its broker
Forex is the acronym of foreign exchange, meaning that you are trading one currency for another. The best example is when you want to change the US dollar for the euro. The role of a Forex broker is to provide traders access to trading platforms for buying and selling currencies.
One of the best examples of quality and good brokers is described in the LBLV review from 2021. You can see all the essential elements of one good Forex broker in that review. This particular review includes information about its account features, customer service, address, etc.
What is precisely the Forex market, and why is it so important
Foreign exchange transactions occur at one of the biggest, most liquid financial markets, called the Forex market. This specific market is available to its customers 5,5 days a week, 24 hours a day. Each day, trillions of transactions are taking place on the Forex market.
As you probably know, this particular market is decentralized, which excludes any physical location. Instead of that location, the Forex market represents an electronic network of institutions, banks, brokers, and individual traders. These individual traders are mostly trading through banks or brokers.
Understanding the Forex market better
It’s important to understand that the Forex market determines the value of the majority of currencies. This market is also known as an exchange rate. When traders are trading currencies, they should know that they are listed in pairs.
For example, the most commonly traded currency pair is EUR/USD, or USD/GBP. On the market, currencies are being sold in lots known as micro, mini, and standard lots. A micro lot is worth 1,000 of the given cash. On the other hand, a mini lot is 10,000, while a familiar lot equals 100,000.
Why is the Forex market so unique?
To get a clear picture of why the Forex market is so unique, the reasons are straightforward. It’s mainly because of the Forex market size. As we are all aware, trading volume on the market is very high.
The largest trading centers in the world are New York, Tokyo, Hong Kong, and Singapore. Since the Forex market is open 24 hours a day, working a working week, all traders from across the world can buy or sell currencies at any given time during the trading day.
The Bottom Line
The forex market differs from other markets globally because there are no central bodies that oversee the Forex market. In addition to that, there are no strict standards or regulations as those in futures, stocks, and options markets.
The most significant advantage of the Forex market is that there is no cutoff time for trading, except for weekends. The liquidity is the main reason for ease of trading access!