What is Online Forex Trading?
The foreign exchange market, also known as FX or FOREX, is the trade of national currencies between different companies, banks, investment funds, and governments that are located in different countries. Due the enormous size of this online forex trading market transactions are required to be completed through brokers, and banks. The FOREX market is present and exists when one currency is traded for another. When you travel to a foreign country, you must ‘trade your money’ for the value of their national currency and this is a good example of the FOREX trading basis. It is the same for companies importing goods, speculators trading news, or people looking for save heavens during uncertain times.
Forex VS Stocks
There are several differences between the stock market and the forex market. The first is the enormous amount of trades that are liquidated in the forex market. Several trillon dollars are traded per day in forex, which is an amount much higher than the money traded on the daily stock market of any country. The forex market is one that involves governments, banks, financial institutions, and speculators all around the planet.
Forex is a liquid market, and trades can be turned back to cash very fast. Some times a given stock has not the enough amount of buyers or sellers to liquidate the trade. The availability of cash in the forex market is something that is always available for investors from any country.
Forex is a global market, that includes fundamentals of many countries. Stock trading involves a domestic market, and fundamentals are based on businesses and products that are within a country. The stock market has specific trading hours. while forex market is open twenty four hours a day due the high number of countries that are involved in different times zones.
Forex Brokers
Forex brokers are companies working as an intermediary between the trader and the liquidity providers, which are the major banks, financial institutions, and major trading firms. These corporations are the real force behind forex trading, and every big move in currencies, are linked with their activity. There are several types of forex brokers, but to make things easy, they offer a price provided by the banks where they access to forex liquidity. Many forex brokers use several banks for quotation, and they’ll offer you the best one available. Brokerage is a sophisticated activity, and for that reason you must choice only regulated brokers in reputable locations.
Trading Platforms
A trading platform is either a software or a web browser application, to exchange buy or sell orders between the trader and the broker. There are several brands available in the market, and some brokers offer their own platform. The most popular trading platforms are developed as a software, but undoubtedly a web browser variant has the advantage of access from any device, trading forex from your office, traveling or being outdoors.
Learn To Trade
Forex trading can be a profitable business, but only for those who are willing to invest the time to complete the basic learning curve of this business. The advantage is that with the advent of the internet there are a large number of high-quality free resources that will undoubtedly help you a lot in your journey. You have a large number of free and paid courses at your disposal, but you can perfectly start without spending money until you decide if this business can work for you. The other advantage is that the brokers offer demo accounts to practice without time limits, where you can invest virtual money.