What is forex trading and how to trade forex?

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Currency has been a standard for trading for centuries. Metals are immensely popular for trading too. Precious metals like gold, silver, platinum, and palladium entice traders and investors alike. Precious metals have inherent value, buy precious metals hong kong. They are rare and organically occurring. They don’t tarnish naturally nor do they corrode or oxidize. They are widely used in jewelry. However, they have a lot of other applications.

Forex trading involves buying and selling currency in pairs. The most popular pair being USD/ EUR. The forex market is open across all countries in the world 24 hours a day 5 days a week and so is forex trading hong kong. You have the flexibility to trade from any part of the world at your convenience. There are no limits or restrictions to how little you trade and how soon you respond to the changing market.

What is forex? 

Forex or FX refers to foreign exchange. When we travel abroad we need to exchange currency. When you do this you buy and sell currency at the current exchange rate. In short, you have traded currency. This is similar to forex trading. Unlike markets such as stocks, the forex market is decentralized.

Forex trading platform

Currencies are traded in pairs of two. For example GBPUSD, here GBP is the base currency and USD is the quote currency.  Buy and sell or offer and bid are other terms used to refer to these currencies.

Price differences create trading opportunities 

The values of currencies change, this is how we trade currencies.  In a forex trade, you buy and sell currencies simultaneously. You can speculate the market if it’s rising or falling. This is a major advantage. When the market is rising, it’s referred to as a bullish market. When the market is falling it’s called bearish. Your trading strategy should be based on the rise and fall of the currency.

It will not be wrong to say forex is the portmanteau of exchange and currency. The past two decades have seen a huge growth of opportunities in trading. Financial markets are becoming accessible to more people. As a trader, before you commit to a financial market, you must weigh its pros and cons. The resources required are relatively low and there is flexibility in terms of time in currency trading. This is why forex is the market of choice for pros and novices alike.