What is Forex? : You can see that in the previous chapter, I haven’t talked about Forex content at all. But what do you know? The content of the previous 3 chapters is significant if you pay attention to it. and can do as recommended You can invest in any market. Let’s get into Forex content by starting with “What is Forex?”
Forex is an abbreviation for Foreign Exchange. It is a market for trading in currency exchange rates.
So what is Forex?
Let me give you a few examples to make the picture clearer. For example, let’s say you are in England and going to travel to Japan. So you exchange pounds sterling for yen. to spend in Japan This is also a part of the Forex market.
or import-export business between Thailand and America This must be in US dollars. in trading It is a part of the Forex market.
or the central bank’s confidence in the economy and currency of a country So they buy the currency of that country, hold it, and sell it. to speculate This is also a part of the Forex market.
Including trading for speculation by “funds” or “retail investors” as well. These are just some examples.
According to the Bank for International Settlements, preliminary global results from the 2022 Foreign Exchange and OTC Derivatives Market Activity Survey show that foreign exchange market trading averaged US$7.5 trillion. per day in April 2022, which increased from 6.6 US Dollars trillion in April 2019, measured by value, which is the highest trading volume in the world. Compared to all stock markets around the world.
Photo credit: Bank for International Settlements
The three markets with the highest trading volumes in the world are:
- London market, England
- New York market, USA
- Tokyo market, Japan
The price will fluctuate according to the Demand (want to buy) and Supply (want to sell) of each currency. This may depend on many factors. Whether it is the interest rate Inflation rate, gold price, oil price, economic condition, or political situation of the country. Events both domestic and international Including the announcement of various important economic figures of the country.
It can be seen that many factors affect price movements in the market. This makes it quite sensitive and volatile.
For the sake of understanding, I would like to call people who come to trade in the market “players” and I would like to call trading transactions “trading”.
In the past, “players” were only large financial institutions such as central banks, private banks, or insurance companies. Due to access limitations, the amount used for trading is very high. This makes small investors unable to access the market.
But nowadays, with the arrival of the online trading system making small investors The market can be accessed from the broker company’s online trading system. That acts as an intermediary in sending trading orders to the market as soon as they are received.
The brokerage company also provides leverage to its clients for trading. This allows small investors to use lower capital. To make a profit in the market (Leverage, I will explain in another chapter)
What are the Forex market hours?
The Forex market is open 24 hours a day, Monday-Friday. and closed on Saturday-Sunday or public holidays.
The first country’s markets to open each week are:
- Sydney market, Australia It is the first market to open at the beginning of the week.
- And followed by the Tokyo market, Japan
- Afternoon is the time for the European market and the London market, England.
- New York market United States It is the last market to open.
This is because of the overlapping periods between countries. This causes the market hours in each country to open at different times, making it possible for the Forex market to open 24 hours a day.
which the opening and closing times of each country It has quite an impact on the selection of currency pairs for trading by “short-term traders” and “day traders”. Because currencies that are during opening hours will be lively, and suitable for trading during that time.
To learn other Forex content, click here.
If you want to start trading and are looking for a reliable broker, here are the top 2 brokers that I would recommend. which we ourselves mainly use for trading as well
Open an XM broker trading account in easy steps. Just a few steps Click on the banner image or just click here.
Or open a trading account with Exness broker easily, click on the banner image or just clicking here.