Q:

What is Forex trading?

A:

Quick Answer

Forex trading is the exchange of different currencies at an agreed rate on the over-the-counter market. Forex is the leading trade market in the world, with over 4 trillion dollars exchanged in a single day.

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Full Answer

The main reason for the existence of Forex trading is to promote investment and foreign trade by allowing businesses to change one currency to another. Currency values rise and fall against each other from time to time due to several factors, such as geopolitics and economics. Traders strive to benefit from these changes by speculating the direction of prices in the future. The good thing about Forex trading is that traders can trade from anywhere as long as they have a computer and an Internet connection.

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Related Questions

  • Q:

    How can you learn to trade in Forex currency?

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    Free, Internet-based foreign currency trading courses are available from websites such as Daily FX.com, XE.com, FXCM.com and Avatrade.com. Prospective traders can also download free training materials from the websites of organizations such as the National Futures Association.

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  • Q:

    Are all world currencies traded on the Forex exchange?

    A:

    Some of the Forex retailers do trade in more obscure currencies, explains Investopedia. However, the more mainstream retailers trade in the most liquid and fluid currency sets. There are seven sets most commonly traded.

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  • Q:

    What are the basic things you need to know when dealing with foreign currency trading?

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    Basic things to know when dealing with foreign currency trading are that it involves a great deal of risk, currencies are traded in pairs, and trading is available 24 hours a day, according to XE. The foreign exchange market, or Forex, has a high volume of trades, which translates to low trading prices. Entering the Forex market is possible with minimal startup capital, since many firms do not charge commission and allow trading on leverage.

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  • Q:

    What are some tips for online Forex trading?

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    To succeed in online forex trading, the trader should choose a trading style that is compatible with his goals and that matches his personality, notes Investopedia. A personality mismatch can lead to stress and certain losses, because each trading style requires a different approach and has a different risk profile.

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