What Is Forex?
Forex is a shortened term used for ‘Foreign Exchang.’ It is the process of buying and selling currencies. The Forex Market is the largest financial market in the world. Just to compare,the New York Stock Exchange makes about $74 billion a day in volume and the Forex Market makes over $4 trillion a day in volume.
How does Forex trading work?
Forex is traded in currency pairs. Common currency pairs are the Euro/US Dollar, US Dollar/Japanese Yen, Great British Pound/US Dollar, and Canadian Dollar/US Dollar. You can buy and sell each currency.
What tools do I need to trade Forex?
You only need a computer with internet connect ions and a funded Forex account to begin trading. However,you should be equipped with Forex education and tools to minimise risks in the Forex market.
How old do you need to be to trade Forex?
You must be over the age of 18 to trade Forex.
What are the Forex Market trading hours?
Market activity hours may vary periodically due to public holidays, seasonal time adjustments, and unusual liquidity conditions arising from exc eptional global events. Weekly activity begins on Sunday at 21:00 Greenwich Mean Time (GMT) continuously until Friday, 20:00 GMT. Most of the instruments are traded on a 24 hour basis without interruption.
What is a Pip?
Pip stands for percentage in point. This is the smallest price change that a given exchange rate can make. It is the movement of the last number on the price: 1.3200 .
What is a Spread?
The spread is the difference between the BUY a nd the SELL price of two currencies. For example, if the EUR/USO was trading at 1.4300 ( buy) and 1.4297 (sell), then the spread would be three pips. Some brokers have f ixed spreads while others have moving or “floating” spreads.
What does going “long” and “short” mean?
Going “long” is when a trader buys a currency expecting the value to rise. This is also called opening a long position. Going “short,” or opening a short position, is when a trader sells a currency, expecting the price to decline so it can be bought back in the future, generating a profit.
What is the validity of a transaction and what is an Automatic Rollover?
The option of automatic rollover allows investors to leave positions opened for a lengt h of self-determined time. When a new position (spot or forward) is opened, it has a default expiration (value) date. At the end of the value date (server time), an automatic process will rollover all relevant open positions to the next spot value date (2 additional business days). All rollovers will be performed at competitive rollover rates, depending on the currency pairs involved. During the rollover process, the traders will either earn or pay away points, depending on the interest rate differential between the two currencies.
How are currency prices determined?
There are various way currency prices can change. Economic and political conditions usually affect the value of a currency, along with interest rates and inflation.
What are Binary Options?
Binary Options are a simple and exciting method of trading the financial markets, based on the determination of whether the price of an asset (such as a currency pair, commodity or stock index) will close ABOVE or BELOW the current price within a set time period. Binary options are easy to execute, fun to trade and highly profitable.
Does the Forex market have a central location?
Unlike stock markets, the Forex market does not have a central location. Transactions take place over the internet or phone which is why the market is available 24 hours a day.