A complete insight into currency forex market trading

Gone are the days when currency forex market trading was the domain of big multinational companies or giant financial firms. Nowadays, more and more people are interested in generating relatively easy money and hence, forex market trade has become immensely popular. Whether you are a newbie, who is trying to gain an insight of the exchange market or an experienced person just trying to refresh your basic knowledge, the present article will prove to be highly beneficial for you.

How The Currency Forex Market is Different?

All the trading markets are different from the currency forex market because the other trading markets take place in the regulated exchanges whereas currency forex market trading is based solely on credit agreements. It is not regulated by the clearing houses or any government entity.

There is No Commission Involved in Forex Trade:

In the stock trading market, stockbrokers trade on the behest of the investors and in return of their services they charge commissions from the investors. On the other hand, in the currency forex trading market, no commission is involved as the exchange firms are not the brokers they are the dealers and presume risk in the transactions done at the behest of their clients. So, unlike the stockbrokers, forex trading brokers do not charge commissions. The forex brokers generate money on spread (difference between the purchase and selling price of the currency). Lower spread means more savings for the trader.

Can Have Initial Trade with Just 300$:

If you are a beginner, you can start trading by opening a mini account by putting in the barest minimum of 300$. However, if you have an expert broker and are sure about your success you can invest thousands of dollars.

What All Commodities are involved in Currency Forex Market Trading?

Since the forex market is speculative, there is no physical exchange of currencies. In the forex currency market, trades are booked on the basis of the currency prices prevalent in the market.

What Currency Pairs are traded in the Exchange?

As per the rules, trading in the forex market is done in the pairs. Some of the traders make a huge profit whereas others have to settle for nominal earnings. This difference in the turnaround is owing to the fact that the traders at a loss have insufficient knowledge of currency forex market trading.

A majority of exchange transactions involves seven liquid currency pairs. The 4 major ones are enumerated below:

  • USD/JPY (Dollar/Japanese Yen)
  • USD/CHF (Dollar/Swiss franc)
  • GBP/USD (Pound/Dollar)
  • EUR/USD (Euro/Dollar)

Final Thought:

In a layman’s term currency forex market trading is a gamble. Before starting, you need to gather the requisite information and know the ins and outs. There was a time when getting technological assistance regarding the forex trade was next to impossible for a newbie. Those days do not exist now. There are plenty of resources available to train you. Forex robots, trading signals and software for analysis has made forex market trade easy and convenient.

Eli Goodman – who has written 327 posts on Caban Destination.


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