Basics of Forex Trade
Basics of Forex Trade
Basics of Forex TradeThe Forex market is one of the largest financial markets in the world. There are enormous numbers of people involved in this financial trade. Many countries are interrelated in this trade. The money involved in the Forex trade is so huge that even the banks do not have control over the market for a longer period.
Statistics say that the Forex trade performs better than the New York Stock Exchange market.
The average turnover per day is about $1.5 trillion. The Forex trade is mainly managed by the main centers such as New York, London, Tokyo, Sydney and Frankfurt. The added advantage of the Forex market is that it runs about 24x7 hours except during the weekends.
The trade that is being done is between the individual and not through the central exchange. The market is known as "interbank" market as the trades are administered over the Counter (OTC).
The Forex trading market mainly involves about the selling and buying of one countries currency against another countries currency. Let us consider an example.
If US buy goods from Britain, then they do not pay in terms of Dollars. They pay only in terms of Pounds. Thus, there is an interrelation between the currencies of one country to another.
Spot market:
One of the most important markets is the "Spot market". This term is given to the market as the trade is performed then and there and the market is sold on the spot. Some of the other trading markets are trading on the margin, Futures trading and the Forward outrights.
Basic strategies of Forex trading online:
There are two main statistics of Forex trade. They are
Technical analyses
Fundamental analyses
Many small and medium types of investors use the technical analyses. This is mainly based on the information of the future fluctuations. There are three fundamental assumptions. They are
The market movements will incorporate all factors.
The history will again repeat.
The change in the process will be directly reflected to the events.
The fundamental analyses take information about the current situation that includes factors such as political information, economy and other related factors.
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