Basic Guide To Forex View

Forex trading is also known as foreign exchange is the market for exchanging foreign currencies. Forex is one of the largest markets in the world, which affects the price of everything around you. It is the most liquid market among all the available markets across the world. However, there is no such central marketplace available for the exchange of currencies. The Forex view trading market is an OTC-based market. The market runs 24 hours a day and five days per week. The trading of currencies in the forex market involves simultaneous buying and selling of two foreign currencies.

What is forex trading?

Forex trading is a web of buyers and sellers, where they can sell and buy foreign currencies. A trader buys foreign currencies and sells another currency. The exchange rate in the forex market constantly fluctuates based on the market supply and demand. In earlier days when the internet was not so popular only large and rich businesses such as international banks, hedge funds, and rich individuals could participate in foreign exchange trade. But due to revolutionary changes in internet networks now anyone can trade in foreign exchange through the online mode.

Different types of forex market

The three different types of the forex market are:

• Spot forex market: - This is a physical exchange of foreign currencies. It happens at the same point when the trade is settled. Therefore, it is referred to as on-the-spot trading.
• Forward forex market: - In this, a contract is made between a buyer and seller on the agreed amount of currency rate or price. It can be settled in a day or can be settled within the range of days.
• Future forex market: - In this type of forex trading, buyer and seller agreed on a contract to set a currency rate and fixed price, which can be done in the future.

Some basic forex terms

Each market has its term and language. These are some terms used in the forex view:

• Currency pair: - All forex traders involve pair of currency. The selling and buying of two currencies happen simultaneously.
• PIP: - It is an abbreviation for percentage in points. It is the smallest possible price change for a pair of currencies.
• Bid-ask spread: - The exchange rate is estimated by the maximum amount a buyer wants to pay for a currency (the bid) and the minimum amount a seller required to sell the currency (the ask). The bid-ask spread is the difference between these two amounts and the value trade.