What is FX?

What is FX?

Forex (FX) is an abbreviation of the English expression Foreign Exchange Operations, which means "conversion currency transactions." These types of transactions make up a large share of the entire global financial market. If the share of securities trading makes for about 300 billion dollars per day, then the FX market exceeds this value more than three times.

For today the currency market came after 1973, when EU member states rejected fixed currency rate.

The leading market currencies are the American dollar, British pound sterling, Euro, Swiss franc and Japanese yen. Besides the main currencies, a number of dealing centers offer clients trading in Canadian and Australian dollars, Swedish and Norwegian krone, and etc.

FX can not be called a market in the truest sense of this word. It does not have a specific trading place, trading can be made by telephone or through electronic terminal. There are always dealers in one or another corner of the globe who want to buy or sell a particular currency at any time of the day. The world's leading stock exchanges open with the change of time zones, starting from Wellington and ending California.

The undoubted advantage of the FX market can be the principle of margin trade. The essence of this principle is that for conducting trading transactions the client is provided with a leverage level of 50, 100 or sometimes more times than his own funds. Thus, the participant of the market with even modest funds can make very sizable deals.

The composition of the currency market is diverse. It involves banks, international corporations, brokerage houses, small firms and private investors. However, the determinants for the price movement are the actions of leading world states. The main constitutive factors include the development of the economy, domestic and foreign policy, the actions of the central bank management bodies.

The entire FX consists of four fundamental parts, only after a deep study of which you can start the process of trading:

- Fundamental analysis;

- Technical analysis;

- Trading psychology;

- Risk management.

Each of these sections is a separate layer of information, without which it is impossible to cover the science of successful trading. Therefore, a beginner trader is strongly recommended to complete training before starting trading with real money in the world of FX.

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