What is Forex Trading

In our Previous post you have learned about Perfect money to start Forex trading. now you will learn step by step each and everything about Forex. Forex, also known as foreign exchange or FX trading, is the conversion of one currency into another.

What is Forex Trading?

What is Forex Trading
Forex, or foreign exchange, can be explained as a network of buyers and sellers, who transfer currency between each other at an agreed price. It is the means by which individuals, companies and central banks convert one currency into another if you have ever traveled abroad, then it is likely you have made a Forex transaction.

While a lot of foreign exchange is done for practical purposes, the vast majority of currency conversion is undertaken with the aim of earning a profit. The amount of currency converted every day can make price movements of some currencies extremely volatile. It is this volatility that can make Forex so attractive to traders: bringing about a greater chance of high profits, while also increasing the risk.

How to Trade Currencies?

All currencies are assigned a three letter code much like a stock’s ticker symbol. While there are more than 170 currencies worldwide, the U.S. dollar is involved in a vast majority of Forex trading, so it’s especially helpful to know its code: USD. The second most popular currency in the Forex market is the euro, the currency accepted in 19 countries in the European Union (code: EUR).

Other major currencies, in order of popularity, are: the Japanese yen (JPY), the British pound (GBP), the Australian dollar (AUD), the Canadian dollar (CAD), the Swiss franc (CHF) and the New Zealand dollar (NZD).

All forex trading is expressed as a combination of the two currencies being exchanged. The following seven currency pairs what are known as the majors account for about 75% of trading in the Forex market:
  1. EUR/USD
  2. USD/JPY
  3. GBP/USD
  4. AUD/USD
  5. USD/CAD
  6. USD/CHF
  7. NZD/USD
Some important things has been mentioned in this post and for your better understanding you can watch video given below to learn following important things like:

=> What is Spread.

=> What is Pips Size.

=> What is Lot size.

=> What is Margin Call.

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