Let us understand what Forex is before going into the basics of Forex. FOREX is the abbreviated form of FOReign EXchange. This is an international market and currency transactions of various countries and continents takes place here. Forex is also referred to as the Cash Currency Market. Either mutual or simultaneous exchange of currencies is called Forex trading. FOREX is also referred or denoted as Forex, FX or Spot FX. Major currencies that are traded would include USD (US Dollars), GBP (British Pound), CHF (Swiss Franc), JPY (Japanese Yen), EUR (Euro members), AUD (Australian Dollar), and CAD (Canadian Dollar).
Have you noticed that all currency symbols have three letters? First two letters represent the country and the third letter represents the currency. Currencies are always traded in pairs like EUR / USD, GBP / USD, USD / CHF, etc. EUR / USD pair is called as Euro-Dollar Pair. Currency pairs that do not involve US Dollars is called cross currency. Understanding about leverage is important when dealing with Forex. Leverage varies from one broker to the other.
Let me explain this with an example as it helps in understanding leverage better. For every USD 1,000 that you have, you can trade 1 lot of USD 100,000. Therefore, if you have USD 7,000, you will be allowed to trade up to USD 700,000 of Forex. You might have heard terms like long, short, pip, lots, bid, ask in Forex market. What are they? Long means to buy and short means to sell. Pip is defined as frequent or common increase in currency. Pip is also referred to as points. Confusing, don't worry. Let me provide an example. If EUR/USD shifts from 1.2568 to 1.2572, then it means four pips, that is, increase in the last decimal point.
Forex Trading Platform provides the essential skills and knowledge to be able to master forex investment and make plenty of cash in the Forex market..
