Introduction to Foreign Exchange and Gold Trading Series: What is International Forex Trading? What is Forex? The international foreign exchange trading market, also known as Forex or Retail Forex, is the largest financial trading market in the world, with a conservative daily trading volume exceeding 4 trillion US dollars. If we compare it with the highest single-day trading volume of 7 billion US dollars in the A-share market, we can easily understand the scale of the forex market.
What is traded in the forex market? In short, forex trading involves "money". Forex trading is a form of trading where one currency is bought while another is sold simultaneously. Forex trading is conducted through brokers or retailers and always takes place in the form of "currency pairs", such as the commonly seen Euro-Dollar (EUR/USD) or Pound-Yen (GBP/JPY). Since there are no physical items involved during the transaction, traders may find forex trading confusing. We can assume that buying a certain currency is like purchasing shares of a specific company; for example, when you buy US dollars, you are essentially purchasing a share of the American economy, the value of which directly reflects the market's judgment on the current and future development direction of the U.S. economy. In short, we can understand the forex exchange rate as the comparative relationship between the economic development situations of two countries. Unlike other financial markets (such as A-share stocks), there is no central exchange in the forex trading market. We can think of the forex market as a virtual market, a 24-hour non-stop market composed of multiple global banks through an electronic network.
Until 1990, forex trading was a financial game only accessible to large capital, with a starting threshold set at $10 million to $50 million. In other words, the forex market was initially set up for the needs of bankers and large institutions, with small funds having no right to participate. However, with the rise of the Internet, online forex brokerage firms have been able to bring this attractive investment method into the public view by integrating resources, allowing small investors like you and me to participate. All you need is a computer connected to the Internet and investment resources from the new forex investment community.
What are the common trading currencies? Symbol Country Currency Currency Nickname USD United States Dollar Buck EUR European Union Euro Fiber JPY Japan Yen Yen GBP United Kingdom Pound Cable CHF Switzerland Franc Swissy CAD Canada Canadian Dollar Loonie AUD Australia Australian Dollar Aussie NZD New Zealand New Zealand Dollar Kiwi
Please note that forex symbols are all composed of three characters, where the first two represent the country and the last one represents the country's currency.
When can forex trading take place? The forex market is a globalized, 24-hour open trading market. At any time, there will always be an economic center operating somewhere in the world, with banks and institutions continuously conducting forex transactions day and night. Due to the globalization concept of the forex market, we can trade at night or in the morning, for example, according to the following timetables of three major economic cities:
Market Status Beijing Time GMT Time Tokyo Opening 8:00 0:00 Tokyo Closing 17:00 9:00 London Opening 16:00 8:00 London Closing 1:00 17:00 New York Opening 21:00 13:00 New York Closing 6:00 22:00
Forex Market (OTC) The forex OTC market is currently the largest and most popular financial market in the world, involving a large number of individuals and organizations globally in trading. The chart below shows the global interaction of forex trading. Among them, the US dollar has the largest trading volume, accounting for more than 86% of the total; the Euro ranks second with 37%; and the Japanese Yen ranks third with 16.5%.
Why should I participate in forex trading? Compared to other investment forms, forex trading has many advantages. Here are just a few of the most common ones:
A truly uncontrollable market: The scale of the forex trading market is too large, with too many participants, making it impossible for any individual (including central banks) to control market prices long-term.
Leverage trading, high returns with low capital: In forex trading, you only need a small margin to control a sufficiently large trading contract. For example, brokers provide a leverage of 200:1, allowing us to operate a $10,000 contract with a $50 margin.
Low entry barrier, minimum participation of $250: Despite all these advantages, participating in forex trading only requires $250, thanks to the development of the Internet! Please refer to Huikai Account Opening Network for account setup.
Two-way trading, profit from both rises and falls: Buy/sell operations allow us to make money whether the market rises or falls.
Global 24-hour market: The global 24-hour market starts from Monday morning Beijing time and ends on Saturday morning, and many market activities occur during Beijing time afternoons and evenings, suitable for part-time investment.
High liquidity market: The large scale of the forex market ensures its excellent liquidity. In other words, under normal market conditions, you can buy and sell freely by clicking your mouse without getting "stuck" in a trade.
Free resources: Simulated trading accounts, news, charts, analysis, etc.
Zero commission: No settlement fees, no trading fees, no government fees, no broker handling fees, extremely low transaction costs.
How do I start participating in forex trading? New Forex suggests that you:
Carefully read every article in the New Forex - Beginner School.
Follow several excellent analysts and traders within the community.
Download MT4 trading software for a period of simulated trading.
Open a real account with a small amount of funds to participate in trading.
The New Forex Investment Community sincerely wishes you smooth sailing in your forex investment journey!
Related thematic articles:
Introduction to Foreign Exchange and Gold Trading Series: What is International Forex Trading?
Introduction to Foreign Exchange and Gold Trading Series: What is International Forex Trading?
Introduction to Foreign Exchange and Gold Trading Series: What is International Forex Trading?