Foreign exchange market or Forex is foreign exchange currency trading. Worldwide need to exchange currencies is the main reason why the Forex market is one of the largest markets in the world trading around $4 trillion every day. If you want to start a foreign trade or business, you want to exchange foreign currencies.
Therefore, Forex or FX relates to buying and selling coins with the purposes of making a profit. There is no central marketplace for Forex trading, and this currency trading is conducted all over the world in almost every time zone. The Forex market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney. Therefore, the trading market is active 24h a day which means that price quotes can change any time.
To know more about Forex trading, you need to learn about some of the basic terms of Forex trading. Some of the commonly traded currencies are EUR/USD, USD/JPY, EUR/GBP. You can also trade with minor currencies such as Mexican peso (MXN), Polish zloty (PLN) or Norwegian krone (NOK). Currency which we want to sell or buy is called base currency and the currency we use to make a transaction is called secondary currency. Base currency, as well as secondary currency, has its own price. The price for selling the base currency is called bid and a price for buying it is called ask. The difference between these two prices is called spread.
Another commonly used trading term is “Going long” and “Going short”, which stands for “buying” and “selling. Terms like “Bull Market” or “Bear Market” are used to describe the was the market is going. In “Bull market” traders are looking to enter the market while prices are rising, and in “Bear market” traders tend to enter the market while prices are falling.