- What is Forex?
- There are 7 main currency pairs
- London is the Centre of Forex trading
- Top 5 Forex Trading Benefits
- Use High Leverage for Forex trading
What is Forex?
Forex is a marketplace where currencies are traded (e.g. EUR/USD).
In simple words, if you change your local currency to any different currency, it is also part of Forex.
If the price of your currency rises or falls, it means that you will earn or lose more money during the exchange.
Deals in Forex are made through trading contracts for difference (CFDs).
It is a way of speculating on financial markets that do not require buying and selling any underlying assets.
CFDs trading consists of creating a contract between the “buyer” and the “seller”, where the latter will pay the price difference at the contract execution time.
There are 7 main currency pairs
Forex is a shortened term used for “Foreign Exchange”, and it is the process of buying and selling currencies.
The “Forex” is very simplest thing, for instance if you change Japanese Yen to American Dollars, that is one “Forex” completed.
Did you know that over 85% of global Forex market transactions happen on the following 7 currency pairs, known as the Majors?
There are more than 100 different currencies in the world, and most of them are traded in the financial market right now. (if today is not the Saturday or Sunday.)
Forex trading includes also when you exchange money at a airport or even sending any products to overseas.
So, if there is any currency exchange is related, Forex market must be involved in the process.
But when people say “Forex”, this usually means that the “Forex” market with brokers or banks where leveraged tradings are made.
London is the Centre of Forex trading
The Forex market operates 24 hours around the clock from Sunday night through Friday.
And it is traded by comprises central banks, currency speculators, organizations, governments, retail investors and international investors etc.
The size of the market is still increasing now and the foreign exchange market is the biggest and most liquid financial market in the world.
Did you know that London is the centre of Forex trading and not New York?
At the beginning of the 21st century, turnover on the London foreign exchange market averaged $504 billion a day, by far the highest amount than any other centre.
In 2001, 31% of global forex activity took place in the UK, and only 16% in the US, making the City of London an unrivalled international financial and commercial centre.
Did you also know that in the forex market the GBP/USD currency pair is known as the Cable?
The reason is that in the early 19th century, the exchange rate between the US dollar and British pound was transmitted via a large steel cable under the Atlantic ocean connecting the London and New York Stock Exchanges.
Top 5 Forex Trading Benefits
Forex trading is considered to be one of the most promising, fast and risky ways to earn money.
Here are the top 5 benefits of trading Forex:
- Accessible: allows secure entrance for novices
- Versatile: offers over 200 tradable instruments rom 6 asset classes
- Reliable: offers the deepest liquidity available globally
- Volatile: open to different trading strategies and experiments
- Active: frequently changing and available for trading 24/5
Open your Demo account with IronFX and discover the benefits of Forex trading.
Use High Leverage for Forex trading
Think of buying 1 USD with 100 JPY and selling that 1 USD with 110 JPY.
That means that you actually made 10 JPY as profit.
This is how the Forex trading works though, the price rate of currencies are not so volatile as you think, as reaching 110 JPY from 100 JPY may usually take a few years or more.
So that means that even if you have bought 1,000 USD, that will give you about only 100 USD in this case.
Well, if that is the case, Forex trading is not for someone with medium money…
But there is a solution for you, and that is the “Leverage”.
IronFX offers up to 1:1000 leverage to traders for Forex trading, this means that when you trade Forex with IronFX, you will have 1000 times more funds available in the account and profit/loss will be also 1000 times more.
So if you made a deposit of 1,000 USD, you will actually have 1,000,000 USD available for trading.
That is the leverage offered by IronFX and that is one of the reason why people trade Forex.
No it is not a debt, but it is the margin provided by IronFX for free for clients of IronFX.
Also IronFX has set NBP (Negative Balance Protection) to all trading accounts, you will not lose money more than you deposit.
In any market situation, your loss will be limited to the amount you deposit before.
If you are not sure about how to place orders and how to see the prices etc, you are recommended to open a Demo account for free with IronFX and try it by yourself.
Demo trading account will give you the exact same situation as live ones, and you can see how to make money and lose money.