Forex Foreign Exchange – What You Need to Know
The Forex foreign exchange market has witnessed massive growth over the years. This business niche impacts the lives of so many people on a daily basis. Simply put, forex trading involves timely and accurate calculation of two national currencies’ exchange rate, in order to buy or sell for profitable purposes. However, sometimes, the transaction may turn out unfavorable, especially when rash trading decisions are involved, or unexpected unfavorable market trend.
Typically, forex exchange trading works this way; a forex trader would buy a desired quantity of a given national currency (e.g. US Dollars) with a certain quantity of another currency (e.g. Euro). Today’s currency trading started taking shape and making waves during the 70s. This is about 3-decades following government restrictions on forex transactions. Before this time, only the large financial corporations and entities are allowed to meddle with foreign exchange trading.
Here are the characteristics that make Forex foreign exchange unique;
• Forex account for massive trading volume that represents the world’s largest asset class. Consequently, currency trading is known for high liquidity.
• Non-stop transaction; forex is also know for round the clock operation. Thus, the market players in this niche carry on activities 24/7, 365 days. The progressive creation of powerful forex trading software and best forex robot makes the entire activities easier. For instance, a trader can trade round the clock without being physically present. These powerful robots and software programs execute trade automatically and often accurately.
• There’s also the geographical dispersion advantage with forex trading. This is one of the features that make this line of business ‘thick’
• When compared with other business niches or markets, there are low margins of relative profit.
• Also, forex trading facilitates the use of leverage for profit and loss margins enhancement, and as regards to the size of a trader’s forex account.
• Forex is also known for the various factors that cause exchange rates fluctuation.
The data from Bank for international Settlements shows the estimated turnover from foreign exchange markets global to be $3.98 trillion on a daily basis, as at April 2010. However, specialist firms on Forex foreign exchange came up with US$4 trillion as the average daily turnover from foreign exchange markets global.
Who is Qualified to Trade Forex?
The answer is simple – anyone. It doesn’t matter how qualified or unqualified you are educationally, you can trade forex. All you need to start trading forex is basic knowledge of how this special trade works. In fact, in recent times, some people allow their brokers to carry on forex trades on their behalf, especially through best forex robot and forex trading software.
However, you need to know that the foreign exchange market is highly volatile. As a result, price fluctuations are the order of the day and trade may turn out rough. But, with the help of innovative forex expert advisors, you can navigate through the odds obtainable with Forex exchange.