According to XTrade Europe, the foreign exchange market (also known as Forex or FX) is one of the major international markets, and very popular with traders on a global scale. Every single day, transactions in Forex reach up to over $4 trillion, and the daily constant trade makes it the single most liquid market in the world.
Since foreign currency exchange happens worldwide, the market is actually open for 24 hours, unlike other markets which are dependent on time zones. On a daily basis, the Forex market begins in Australia and ends in New York. This means that a trader can trade in real time and strike “while the iron is hot”. Being the platform where world currencies are traded, the Forex market is a dynamic community.
Another difference between Forex and the stock market is that the market does not have thousands of stocks to select from. When registering for a XTrade Europe account, the trader can focus on selecting from just a few currencies compares to thousands of stocks. The Forex market usually revolves around major and minor currencies. There are some traders who prefer to dabble in exotic currencies and virtual coins, and some brokers provide the opportunity for them to do so.
How to Trade Forex – Basic Guidelines from XTrade Europe
Before you start trading, there are basic Forex terms that you need to know. One of the most important terms to learn is PIP. PIP stands for Percentage In Point, and in Forex, the currency value is in PIPs. The term “spreads” is simply the difference between the ask price, the amount of the currency when you buy it, and the bid price, the amount of the currency when you sell it.
It is a common practice among online traders to allow CFD Forex traders to trade currency pairs without commissions. However, there are usually fixed spreads. This means that there should be between 2-5 pips EUR/USD between the buy and sell prices. Traders can also take a risk and trade on leverage. This allows your potential gains and losses to be magnified.
There are basic courses available from online brokers once you sign up. They will give you the step-by-step process in trading Forex and the novice trader is even given the chance to set up a dummy account in order to practice trading without risks.
Possible Forex currencies that can be traded
Many Forex traders use major currencies for trading, but at XTrade Europe, they also allow Forex trading in minor currencies, exotic currencies, and even virtual coins. The most common major currency pairs are the Euro/US Dollar, the Sterling Pound/US Dollar, the Japanese Yen/US Dollar, the Euro/Japanese Yen, the US Dollar/Swiss Franc, the Sterling Pound/US Dollar and many more. Minor currencies that can be traded are any combinations of the Norwegian Krone, the Swedish Krona, Canadian Dollar, New Zealand Dollar, Australian Dollar, and the Russian Ruble.
Other world currencies such as the South African Rand, the Danish Krone, and the Singapore Dollar are considered exotic currencies.
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