The Forex Exchange Market is quite possibly the most well-known market in the entire globe. One of the most recognizable names in the trading industry, simply because it shows up in most news network, it is where financial titans, powerful corporations, large monetary institutions, such as Citi Bank, HSBC and Deutsche Bank, hedge funds, and powerful and incredibly rich businessmen make money. With the advent of the internet and the popularity of online engagement and transactions, individuals with a modest amount of resources in various parts of the world are also able to participate in online Forex trading, basically, they can buy and sell currencies via The Internet.
What is Online Forex Trading?
The main business of the Forex Exchange Market is currency trading. The continuous exchange of various currencies makes it possible for countries, businesses and even sole individuals to effectively pursue online Forex trading. For example, if you are a Chinese businessman and you wish to buy a premium automobile from an acclaimed manufacturer in Germany, you’d have to pay in Euros. The Chinese importer must, of course, pay in the European currency.
Most of the currencies are paired by two as a base currency and a quote currency. An example of this is dollars to euros. The exchange rate between the two usually changes and fluctuates depending on the economies of the nation. The changes, increases, and dips are recorded in what is called a forex chart, which currency traders also use as important reference documents for analysis and study.
Foreign trade happens all the time. It’s how the world functions and it’s how countries have the resources to survive, thrive and develop. Just look the trade of raw materials such as zinc, nickel, iron, copper and even oil. A lot of these are purchased and acquired through the exchange of currencies.
An average of 2 billion dollars is exchanged every single day in this market, and the considerable amount goes through online Forex trading. On some unique and special occasions, that amount fluctuates. In 2012, there was a time when the forex market was able to reach 4.9 trillion dollars’ worth of trading in a single 24-hour time frame.
Where does one do Forex Currency Trading?
A lot of people have the idea that trading is done on the floor, with a bunch of guys exchanging pieces of paper or large amounts of money. That’s not entirely accurate. Most of the trading is done electronically and online, using a reachable but secure database. Transactions are accomplished and completed via computer networks found all across the globe. With the popularity of handheld computers, transactions can also be done through mobile and tablet means.
Currency trading primarily happens in the largest financial centers, which includes New York, London, Frankfurt, Paris, Zurich, Hong Kong, Singapore, Tokyo and Sydney in Australia. It is open for 24 hours and five days a week. Given there are different time zones in the world, the online Forex trading was designed in such a way that a country opens to business when someone closes, creating a system of continuous transactions. Because of this, the forex trading network never sleeps.