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What is Forex?

Forex Basics 

What is Forex? This is a question that  frequently arises in the minds of those who see the name “Forex,” but don’t know anything about the topic. Our duty is to clarify and explain everything related to Forex, so that this important question is answered.

First things first, let's highlight that the Forex market is one of the biggest global financial markets, if not the biggest ever. It has the largest financial liquidity, of up to $4 trillion a day, which does not exist in any other financial market, and is traded in this market on currencies, commodities, and metals.

How is trading done in Forex?

Trading is done through the purchase or commerce of currency pairs and each pair consists of two currencies, which means that the trader buys a currency, and sells another one in return. There are a couple of pairs that are known as primary pairs. These include:

Euro/Dollar, Yen/Dollar, Euro/Yen, Pound/Dollar, Dollar/Frank, Sterling Dollar/American Dollar, New Zealand Dollar/American Dollar, and others.

The trades are initiated based on a clear trading strategy, which means that there are both short-term and long-term trading options.

The seriousness of the Forex market

There are a number of novice traders who are afraid to enter the Forex market, because of the high risk involved. The  risk is quite real, so we must make it clear to all traders that the Forex market is a serious one. Much depends on the trader himself, and not necessarily the market, which is dependent on the trading method implemented, and the trading basis, of which there are many. Also, another important factor is how the trader administers his capital in a form that enables him to prevent it from corroding. The first of these methods, is not starting any deals until fundamental analysis and technical analysis has been done by the trader. These two types of analysis are taught from the start of trading, and allow people to develop a clear plan for trading, in order to reduce risk while participating in the Forex market.

The trader should be aware that he must possess many of the attributes that would enable him to succeed. These include contentment, patience, avoiding greed, and the ability to resist temptations.

The Forex market is the best

Of all the financial global markets, Forex is known for its working hours, being 5 days of the week, for 24 hours a day. This means that trading is available anytime, day or night. This makes Forex more special, since along,with its large financial liquidity and the large size of trading, it makes whoever trades in its  market the owner of a larger profit rate than the rest of its global capital counterparts.

A demo account is available to traders, and can be used in training. It not only needs to be used in the beginning, but is also important in the training and development of trading strategies. The demo account has the actual prices for the markets, but functions by using imaginary money. This means that it is not possible for a trader to lose any money on this account. That's what makes it an excellent starting point for traders.