Forex

Forex

Forex, also known as FX, stands for Foreign Exchange. Forex is the largest financial market in the world and trades in international currencies. The Forex Website has a lot of educational resources, including Webinars, video tutorials and other ways to learn about trading, identify trends and perform financial analysis.

The method of operation on Forex is buying one currency while simultaneously selling another, several major pairs of currencies exist. Typically, traders take advantage of the differences between the currencies and the volatility of the market to earn a profit. Indeed, over ninety-five percent (95%) of traded currencies in the world comes from speculation for profit on the foreign exchange platform. The market is an over-the-counter one, which means that it lacks a central exchange.

Interestingly enough, most traders concentrate on the most traded currency pairs, the biggest, called The Majors; these pairs include the US Dollar, Euro, Canadian Dollar, Australian Dollar, Japanese Yen, Swiss Franc and British Pound. Approximately eighty-five percent (85%) of daily trading relates to these major currency pairs. The market is open twenty four hours (24h) from Sunday at 17:00 to Friday at 17:00 and has an impressive daily turnover of over three trillion US dollars (US$3.2 trillion).

Free Hugs manifestation in Montreal. Photo: Elena

By the same token, most tourists notice that they can take advantage of another country’s lower currency. Indeed, their purchasing power suddenly rises when they are in another country with a weaker currency. Economically, the situation is a good one for the country with the weaker currency because it stimulates exports. From economics, it must be remembered that exports form part of the equation to calculate GDP.

On the professional side, there are two main schools of thought for traders. Thus, traders may be referred to as fundamentalists or technicians. However, as if often the case with seeing the world in black and white, rather than in shades of grey, most smart and successful traders use a blended approach. Therefore, it seems reasonable to include in one’s financial analysis price charts, economic data, as well as political and social environments which can influence price action.