i love forex – What is forex
i love forex _What is forex
Forex is one of the types of direct trade, which is an abbreviation of the term Foreign Exchange Market, that is, the foreign exchange market, by trading one currency against another, often with the aim of making a profit.
In addition, the forex market is one of the most dynamic and active financial markets, as it provides its users with high levels of liquidity that most other markets lack.
The forex market or the foreign exchange market is considered one of the largest financial markets in the world in terms of liquidity, with an average trading volume of more than 5 trillion dollars per day.
Currency pairs and trading price
Currencies in the forex market are traded in pairs such as the British pound against the US dollar, the US dollar against the euro, with the aim of making profits through the spreads.
Currency rates in forex are determined based on the rate of supply and demand, while the price differences between them are known as the “spread”. Below we will show the most common currency pairs in the forex world:_
The euro / US dollar is referred to by the symbol (USD / EUR).
The British pound / US dollar is referred to by the symbol (USD / GBP).
US dollar / Japanese yen (JPY / USD).
Euro / Japanese yen (JPY / EUR).
Australian dollar / US dollar, referred to as (USD / AUD).
The New Zealand dollar / US dollar is referred to by the symbol (USD / NZD).
The Canadian dollar / US dollar and symbolized by (USD / CAD).
The forex market has a lot of different currencies from all over the world, and the foreign currencies in the market are divided into: major currencies, minor currencies and western pairs. Major pairs include 7 most popular pairs mentioned previously, while in minor pairs the major currencies are traded between them except for the US dollar, while the western pairs have one major and one minor currency such as USDNOK and EURTRY.
The major currencies depend entirely on the world’s most powerful economies such as the United States, Japan, Switzerland, the Eurozone, Canada, the United Kingdom and New Zealand.
The trading price of a currency pair is the value of the quoted currency that you can buy for one unit of the base currency.
For example: the euro and the US dollar are the most popular and traded currency pair in the forex market. When looking for the exchange rate of the Euro against the US Dollar, you want to know how many dollars (the quote currency) you can buy for 1 Euro (the base currency).
If the EUR/USD exchange rate is 1.2356, this means that you can buy 1.2356 USD for every 1 EUR.
If the exchange rate is in an upward trend, this means that the base currency is getting stronger against the secondary currency.
But if the exchange rate is in a downtrend, this means that the base currency is weakening against the secondary currency.
An explanation of currency pair trading
On the other hand, the spreads change according to the popularity of each currency pair, which is determined by the daily trading volume of this pair. Usually, the volume of liquidity and the price differences are directly related, meaning that the higher the liquidity rate leads to the lower the spreads and vice versa.
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Forex Market Forex Market
With more than 5 trillion US dollars in liquidity circulating in the market daily, it can be said that the forex market is the most liquid in the world, and what distinguishes the forex market is that it does not have a specific site through which currencies are traded, which makes it one of the most flexible financial markets, It is available online for any investor from all over the world.
The forex market includes many global financial bodies and organizations such as central and commercial banks, governments, financial authorities, international investors, local investors and individual traders. Forex market traders rely on the Internet to follow the price movements of the currency pairs they own, through specialized financial intermediaries.
In principle, this means that you can buy almost any currency as you wish and at any time when the market is open. Market opening hours are the main factor that determines the advantage.
The forex markets operate 24 hours a day, 5 days a week, from Monday morning until Friday evening, excluding global public holidays.
Trading in the global market begins in New Zealand, then in Australia, Asia and Europe, and finally in the USA, allowing at any time of the day or night from Monday to Friday.
Important tools for trading in the forex market
News and reports on currency rates: Following up on currency news is one of the most important procedures that can be used in forex trading, thanks to the ease of obtaining it and following moment-to-moment price updates through the Internet. Experience through tips, which helps in following sound forex trading strategies.