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The main functions of the forex market are:
Most currency trading is based on speculation. Most of the trading volume comes from traders that buy & sell based on the short-term price movements of currency pairs.
The forex market is relatively very liquid but the market depth could change based on the currency pair & time of day.
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A currency future is a contract that details the price at which a currency could be bought or sold and sets a specific date for the exchange.
Currency futures were created by the Chicago Mercantile Exchange (CME) way back in 1972
Since futures contracts are standardized and traded on ...
Forex is the global financial market that allows one to trade currencies.
An exchange rate is the relative price of two currencies from two different countries.
It’s these changes in the exchange rates that allow you to make money in ...
There is a secondary OTC market that provides a way for retail traders to participate in the forex market.
Forex trading providers trade in the primary OTC market on your behalf. They find the best available prices and then add a “markup” before displaying the prices on their trading platfo...
There are only 7 major currency pairs.
Compared to the minors and exotics, the price moves more frequently with the majors, which provides more trading opportunities.
Among the financial instruments, the most popular ones are:
The simple answer is MONEY. Specifically, currencies.
The price of the currency is usually a direct reflection of the market’s opinion on the current and future health of its respective economy.
In general, the exchange rate of a currency versus other currencies is
Forex trading is the simultaneous buying of 1 currency and selling of another.
When you trade in the forex market, you buy or sell in currency pairs through a “forex broker” or “CFD provider”.
An exchange rate is the relative price of 2 currencies from 2 different cou...
Exotic currency pairs are made up of one major currency paired with the currency of an emerging economy, such as Brazil, Mexico, Chile, Turkey, or Hungary and many others.
Basically, an exotic currency pair includes one major currency alongside an exotic currency.
An “option” is a financial instrument that gives the buyer the right or the option, but not the obligation, to buy or sell an asset at a specified price on the option’s expiration date.
If a trader “sold” an option, then he or she would be obliged to buy or sell an asset at...
While not as frequently traded as the majors, the crosses or minors are still pretty liquid and still provide plenty of trading opportunities.
The most actively traded crosses/minors are derived from the three major non-USD currencies: EUR, JPY, and GBP.
A CFD is a contract, typically between a CFD provider & a trader, where 1 party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade.
Trading forex CFDs gives you the opportunity to trade a currency pair in both...
The spot FX market is an “off-exchange” market/an over-the-counter (“OTC”) market that operates 24 hours a day.
A spot FX transaction is a bilateral (“between two parties”) agreement to physically exchange one currency against another currency.
I want to make summary of what I have learned about Forex so that I can refresh it again.
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