Forex means FOReign EXchange and it is a global market where world currencies can be traded against its other. Forex Market is huge with daily volumes of about 5 trillion dollars. The Forex Currencies fluctuate according to actual monetary flows but additionally according to anticipations about global economic conditions.
Forex Market Participants
Forex market incorporates many different types of participants, the most important are:
1. Central and Commercial Banks
2. International Trade Companies
3. Forex Brokers (ECN, STP, and Dealing-Desk brokers)
4. Large, Medium, and Small Institutional Investors (i.e. Investment Companies, Hedge Funds, etc)
5. Common Retail Traders | 6. World Travelers
Where is Forex Situated?
Forex works as a non-centralized network. It works almost the same way as the internet does (World Wide Web). That means that every order from any trader is executed in a global network of demand and supply, called the ECN network (Electronic Network of Banks). That fact adds reliability and transparency into Forex trading transactions but most importantly it adds liquidity and that means low cost of transactions.
What are the Advantages of Trading Forex?
Forex Trading offers some unique advantages:
(1) Enormous liquidity which is transformed into minimal transaction cost (cost is measured basically by the spread which is the difference between buyers and sellers)
(2) Huge Leverage) Leverage means trading with more funds than you hold in your account, a common leverage in Forex Trading is 100:1)
(3) Wide Choice of everything (Hundreds of brokers to choose from, hundreds of strategies, manual and automated systems, signal providers, you name it!)
(4) Trading 24 hours per day (24/5) and access via desktop and mobile devices
(5) Fantastic Forex Promotions are available at any time (50-100% welcome bonus or even No-Deposit bonus up to $100)
Forex Sessions
- There are 3 trading sessions: 1) New York Trading Session | 2) London Trading Session | 3) Tokyo Trading Session
Forex Market Trading Hours
The Forex market is an OTC (Over-The-Counter) Interbank market open for 24 hours a day. The Forex market opens at 21:00 GMT on Sunday and closes on Friday at 21:00 GMT.
» Download the Best Forex Trading Guide {Free by Qexpert.com}
Actually, there are two Forex time zones, the winter, and the summertime zone.
1) The Winter Time Zone (October to April)
|
Time Zone (Open-Close) |
EST |
GMT |
|
New York |
8:00 AM |
1:00 PM |
|
London |
3:00 AM |
8:00 AM |
|
Tokyo |
7:00 PM |
12:00 AM |
2) Summer Time Zone (April to October)
|
Time Zone (Open-Close) |
EDT |
GMT |
|
New York |
8:00 AM |
12:00 PM |
|
London |
3:00 AM |
7:00 AM |
|
Tokyo |
8:00 PM |
12:00 AM |
Three (3) Categories of Forex Currencies
Currencies are traded in pairs, you buy one and at the same time you sell another currency. In any currency pair (in the above example EURUSD) the purchased currency is called the Base Currency (EUR) and the sold currency is called the Quote Currency (USD).
Forex Currencies are divided into three (3) Major Categories:
(a) Majors (these are the most popular and less expensive currencies to trade -EUR/USD, USD/JPY, GBP/USD, USD/CAD, USD/CHF, AUD/USD, and NZD/USD)
(b) Minors (these are popular currency pairs but not as popular and as liquid as the Forex majors)
(c) Exotics (these are the less popular Forex Pairs and that means expensive spreads when trading)
Forex Lot Sizes
A Lot in Forex Trading is the standard unit size for any transaction. There are three lot sizes, if you are a beginner the choice for you is the micro lot:
(i) Micro Lot → Suitable for Forex Beginners the size is $1,000 (that means you may open a position worth a couple of US Dollars)
(ii) Mini Lot → Suitable for Advanced Traders, the size is $10,000
(iii) Standard Lot → Suitable for Pro Traders, the size is $100,000
COMPARE: » Forex Brokers Online | » Forex Bonus
Get more answers about what is Forex: » What is a Forex Account | » What are Forex Signals | » What is ECN Forex Trading | » Forex Trading Orders | » What is Forex Scalping | » What is a Forex Broker | » Forex Trading Styles | » What is Forex Robot (Expert Advisor) | » What is MetaTrader
◘ What-is-Forex.com (c)
