Introduction to Forex Markets

It is important to add that the forex market is not actually 24/7 - there is some break every weekend. More exactly, you can trade forex from 5 p.m. EST on Sunday until 4 p.m. EST on Friday - and bank holidays also interfere with that.
 
It is important to add that the forex market is not actually 24/7 - there is some break every weekend. More exactly, you can trade forex from 5 p.m. EST on Sunday until 4 p.m. EST on Friday - and bank holidays also interfere with that.
That's right, forex is a 24/5 market, so it remains closed on the weekends.
 
I really liked how you touched on the basic yet crucial aspects of forex trading that many new traders won’t be able to find easily on the internet.
 
Positioning your money in the hand of any non regulated and random broker can be a greater threat for you. As forex market has limited restrictions and no monitoring exchange authority will supervise the scams you need to take intermediary assistance from only regulated trading platform here. Today every trader requires handling his money with the help of only credible broker here as fraudulent activities are seemingly increasing in number.
 
As you virtually own currencies of other countries by putting in your real money, you need a big heart to trade forex. Better prepare yourself mentally before financially because that's what I believe is more important for a beginner.
 
You will be putting your real money into something that you will never own physically. This is all a game of trust and if you can't trust anyone or anything with your money, forex trading is not for you.
 
The forex market is extremely volatile which makes it hard to predict precisely. One needs to be really well versed with their strategies and the type of analysis they want to prefer in order to spot potential opportunities and actually coming out of it with profits.
 
The forex market is extremely volatile which makes it hard to predict precisely. One needs to be really well versed with their strategies and the type of analysis they want to prefer in order to spot potential opportunities and actually coming out of it with profits.
I totally agree! For a trader to make the best and objective trading decisions one should have a good amount of knowledge and understanding about the market.
 
Great
he term “Forex market” is used very frequently in the media as well as in day to day life. It conjures up an image of a huge historic building somewhere in Canary Wharf or on Wall Street. However, that is not how the Forex market works. This market is unique in many respects and to understand it, one first needs to understand its unique characteristics. The unique characteristics of the Forex market are as follows:

No Physical Existence

The stock markets and bond markets of the world have a physical existence. If you wanted to visit the New York Stock Exchange or the London Stock Exchange, there would be a historic building that you would end up visiting. However, this is not the case with Forex Markets. Forex Markets do not have any physical existence. This means that there is no building anywhere in the world where Forex dealers are located and have designated the place to be the Forex Market.

Instead, the Forex market is made up of money changers all over the world. The market is interconnected via means of information. Earlier, the information was transmitted manually, now the information is transmitted via electronic means. Therefore, the currency dealer in your neighborhood as well as in a far off place like Mexico City together all constitute the Forex Market. The Forex market therefore constitutes an interconnected network of buyers and sellers.


Largest Market in the World

The Forex market is by far the largest market in the world. The daily transaction volume in the Forex market is over $4 trillion. This massive amount of money does not change hands even if we consider the imports and exports of the entire world for an entire year!

The trading volume in the Forex markets dwarfs the trading volume in all the stock markets of the world by a huge extent. Also, the trading volume is greater than some of the oldest and most advanced bond markets in the world. The Forex market is also the oldest financial market in the world which helps in making it the largest!


24 by 7 Market

The Forex market is the only 24 by 7 market in the world. This means that the market is operational all the time. This can be contrasted with stock and bond markets which operate for only a few hours every weekday. In case you want to buy or sell Forex there is always someone somewhere on the planet that is willing to sell it. If you are trying to sell in the middle of the night in the United States, maybe a buyer in China is willing to buy! If you are trying to sell your currency on a Sunday, buyers in the Middle East are transacting because they work on Sundays and have their week offs on Friday! Therefore the convenience and flexibility provided by the Forex markets is unparalleled.

Liquidity

The fact that the Forex markets are open 24 by 7 and have the largest trading volume in the entire world makes it the most liquid financial market. Anyone who wishes to buy or sell their currency holdings can do so in a matter of seconds with a mouse click and with minimum loss of value. Forex prices are readily quoted on a real time basis by various individuals and organizations in the world. Also, since there are so many intermediaries around the world that deal in these currency markets, the transaction costs for such trades is very low. These trades are carried out on a global scale and are not restricted by any geography. As such, there is minimal taxation on these trades!

Transparency

Forex markets provide a benchmark for transparency that can be followed by other financial markets. The trades that happen in these markets are diffused all over the world and are conducted during different time zones. Yet, the information systems are so well developed that all the information is available instantly at the click of a button, any time of the day! The data is collated and presented to the investor to enable them to make informed decisions. Also, since so many individuals and organizations operate in the Forex market, foul play is nearly impossible. There are government organizations like Central Banks of various nations which operate in this market and hence one can be sure that this market works efficiently.

Trading Options

The Forex market provides a wide variety of options when it comes to trading. There are long and short sides of any contract always available. Then there are contracts of various sizes and in various currencies. Also, the Forex market provides the investor with a choice regarding varying degrees of leverage. The amount of leverage provided by the Forex market is simply astounding. However, it is advisable that the traders exercise caution while using it.

The Forex market therefore has a lot of unique characteristics. These characteristics are important to get a first impression of this huge market. As we progress later in this module, we will realize that each of these characteristics has far reaching implications on the way trades actually happen and whether they are profitable or not!
Great article! There is another important fact about trading on the forex market that I would like to add. Forex has never been affected by a crisis since economic turbulence, and breaking news has always been there to offer trading opportunities for traders who know how to capture them. Here's how to get started trading forex in simple steps.
 
We can't do anything about the forex market being unpredictable. But we can definitely build our strategies in accordance with the market nature so that it doesn't affect you much.
 
There is no end to learning forex trading. You will have to keep honing your skills through patience and discipline. Along with analysing the market, you will have to analyse your past performance to ensure that you don’t repeat the same mistakes in the future. Keep fear and greed out of the equation and that’s the only mantra to stay in the market for a long time.
 
The market’s liquidity makes forex trading appealing to traders. But there is one thing that traders shouldn’t forget that the market is not their friend. It changes from time to time. You have to continuously study it if you want to become profitable.
 
Forex refers to foreign currency exchanges where traders are actually dealing with various currency pairs. Like any financial market a good trading plan can do many things for a forex trader since trading plan is an action diagram that helps a trader to achieve his trading goals. And my broker ForexChief is always providing me proper assistance and expert advice through its 24 hour customer support so that I can successfully engage in forex trading according to my plan.
 
Hard work and patience pays off in profits, if a trader manages to possess the basic knowledge required to perform successfully, by reading and analyzing the market nature, and applying all their skills to getting better at learning consistent profit, they are considered passionate and determined. It truly is a great investment.
 
This was a very detailed and informative read. Individuals who are just starting out must stay focused and be able to learn from their mistakes while keeping cool. The most successful traders are strong minded and open to adapt as the market continues to shift.
 
Thank you for this post! This was very informative and is great for new traders to get the basic gist of the market. Aside from that, it's great as a post for older traders who want to relearn the trade. Good job writing it
 
Knowing about the market in detail is important before you start trading as the market fluctuates quite frequently and to stay above your game, you need to be patient and practical and know when to enter or exit a trade depending on your trading system and personal goals. As you grow, you learn that to succeed, to earn profit consistently, you need to calculate a risk reward ratio and control money efficiently.
 
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