The forex market is by far one of the most liquid of the global asset markets.

Forex is a global marketplace for trading one currency for another.
Central banks are also involved in the forex market, buying and selling currencies in order to push the value of their native currency either higher or lower.
The forex markets offer investors liquidity and 24/7 trading — but they’re highly volatile.

If you’ve already begun your investing journey, the stock market is a familiar place. But if you’re looking to expand your portfolio and see how else you can strengthen your portfolio, there’s foreign exchange, or forex.

Forex involves trading one currency for another. For example, a person could exchange the US dollar for the Japanese Yen. Forex offers deep liquidity and 24/7 trading, so investors have ample opportunities to get involved. 

Understanding forex 

The forex market is a global electronic network of banks, brokers, hedge funds, and other traders. This market is where one currency is traded against the other in an effort to turn a profit. 

Central banks are also involved in the forex market, where they’re responsible for maintaining the value of their countries’ currency. This value is represented as the exchange rate by which it will trade on the open market. 

Market participants can trade in the spot market and also buy and sell derivatives. As a result, they can trade futures, forwards, and swaps.

Quick tip: The spot market is a financial market where investors can trade currencies, commodities, and securities instantly.

Investors trade forex in pairs, which list the base currency first and the quote currency second. For example, if someone trades the JPY/USD, the Japanese Yen is the base currency, and the US dollar is the quote currency.

Each forex trade involves a pair of currencies.

Investors who …read more

Source:: Business Insider

      

(Visited 2 times, 1 visits today)

Leave a Reply

Your email address will not be published. Required fields are marked *