ANSWERS: 1
  • FX trading, or forex trading, is the process of purchasing money in one world currency while selling money in another currency at the same time. In basic terms, when you enter an FX trade, you are trading the money you just sold for the money you want to buy.

    Why FX Trading?

    Because the prices of world currencies change regularly, most people who trade in forex are simply "speculating." That is, they are looking for relatively quick profits.

    FX Market

    Since forex trading happens whenever markets are open, it is essentially a 24-hour market. Depending on the currencies you trade, you could be trading at virtually any hour of the day or night.

    FX Basics

    Forex trades occur in pairs, like US Dollar and Great Britain Pounds. If you visit any forex trading website, you'll see the pairs abbreviated and listed together, such as USD/GBP. The most common trades--that is, the currencies that change more than others--are in U.S. Dollars, Japanese Yen, the Euro, and British Pounds.

    FX Quotes

    The first abbreviation you see in a trading pair is known as the "base," which means that the trade you're looking at shows you what the base is worth in the other currency. For example, USD/GBP would show you how many British pounds you could buy for one U.S. dollar.

    How Do I Trade in FX?

    There is no physical "exchange" for forex trading, such as the New York Stock Exchange. Forex trades occur either on the phone or online. There are numerous online brokerages where you can learn more about FX trading, create a "dummy" trading account, and also open a real account.

    Source:

    Forex.com

    More Information:

    Federal Reserve Bank of New York

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