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Forex Trading Is? Here The Complete Answer

Forex Trading Is trading currencies from different countries to each other. Forex stands for Foreign Exchange. For example, in Europe the currency in circulation is called the Euro (EUR) and in the United States, the currency in circulation is called the US Dollar (USD). An example of forex trading is to buy Euros, while simultaneously selling US Dollars. This is called to be abbreviated EUR/USD. learn forex transactions

Meanwhile, the Forex market is a non-stop cash market where the currencies of the countries are traded, usually through brokers. Foreign currencies are continuously and simultaneously bought and sold in local and global markets. Forex market participants then experience an increase or decrease in value based on currency movements. Foreign exchange market conditions may change at any time in response to real-time events.

The Forex market is often called the foreign exchange market, it is a large market with growing and liquid finance (can be deposited and withdrawn at any time) that operates 24 hours a day. This is not a market in the traditional sense as there is no central location for trading. Most of the trading is done through through the electronic commerce network. The foreign exchange market allows companies, banks and other financial institutions to buy and sell foreign currency, in bulk.

The main market for currencies is the "interbank" market where banks, large corporations and large financial institutions manage the risks associated with fluctuations in currency exchange rates.


The following are the main currencies traded in the market:

US Dollar (USD)

Japanese Yen (JPY)

Euro (EUR)

Canadian Dollar (CAD)

Australian Dollar (AUD)

Swiss Francs (CHF)

British Pounds (GBP)


In general, Forex Market players come from various groups including:


Banks and Financial Institutions



Business people


Customers, such as multinational companies, participate in the forex market because they need foreign currency for their trades in other countries. For example, a certain company based in the UK needs to use the forex market to buy the currency they need to pay for their partner company in another country that sells heavy equipment.

Banks and financial institutions, are the most active participants in the forex market. They deal with other financial institutions to ask for their foreign exchange rates and they can buy the currency they need in the forex market. In addition to the central bank and the government, one of the biggest players in forex transactions is the bank. The interbank market is a market where the big banks trade between them and set the currency prices to be as visible to individual traders like us on a computer screen.

Banks, in general, act as dealers who buy/sell currencies at their bid/ask prices. One of the ways these banks make money is to sell the currency at a higher price than it buys to its customers. Because the forex market is not centralized, aka decentralized, it is natural to see one bank with another bank having a slight difference in the exchange rate.