Forex Basics

What is the meaning of Forex

The term Forex denote the global exchange market where one or more currencies are traded for one or more currencies.

Have you been to another country? If you have, you can recall the currency exchange center that is always available at the airport. There, you can quickly and conveniently exchange the currencies you have with you for that of the country you’re visiting. It’s as simple as that.     

So how do you go about this?

Well, as we said earlier, it’s straightforward. Just go up to the counter and look upwards, you will find a screen displaying all types of exchange rates under different currency headings.

For instance, if you are moving to China from the United States, you will find the Chinese Yuan, listed up there at the Forex rates display screen, and before you know it, you’re already rejoicing within yourself about how lucky you are for your $10 to be worth a 100 Yuan. At this point, you have the feeling that you’re going to be rich down here!     

Well, it’s good to dream, but know that whenever you do this, you have already taken part in the global forex market! That’s right! What you just did is to exchange one currency for the need of another. To put it more succinctly in forex trading terminology, you have sold some dollars and bought some Yuan. That is forex for you.

On the way home, you decide to visit the same or similar currency exchange center with the intention of exchanging the Yuan that you somehow left over, and then you notice a change in the exchange rates.   You may wonder; why the differences? What does it mean?

Well, the ability to make money in the foreign exchange marketplace largely depends on these changes in the exchange rates.

While the New York Stock Exchange (NYSE) can boast about  $22.5 billion volume in turnover rate per day, it is nowhere near the incomparable and gigantic sum produced by the foreign market—a sum that amounts to earth shattering $5 trillion volume turnover rate per day. It’s just unbelievable!

We are talking “Trillions” not some “mere” Billions.

Okay, maybe we should take a little time to put this into a clear picture using some notable key indicators like monsters…

The NYSE is the largest stock exchange in the world, trading at a turn over rate of $22.5 billion each working day. Now, if will are to use some form of monster to showcase its greatness in respect to what it generates, this is how it would look like….

Doesn’t it look intimidating? Some folks might even find it sexually appealing, lol!

There is a hardly a day that goes by that you don’t hear of the NYSE. It is always on the front pages of the news financial segment headlines…Whether on BBC, CNBC, Bloomberg, or even on CNN. Gaddamit! You probably hear about it sometimes at the local gym. Some might feel haunted by news on the NYSE no matter where they go.              

Well, well, but it would interest you to know that each time folks use the term “the market,” they are generalizing it to mean the entire stock market. Therefore, this gives the notion that the NYSE is so huge, loud and very intimidating.

Now, you can see clearly that the NYSE is just like a spider compared to the elephant that is the forex market. Everything about the NYSE is just hype; it doesn’t stand a single chance in comparison against the almighty forex market. That is fact, not fiction.

For more illustration, take a proper look at the graphical representation highlighting the average daily trade volume of NYSE, London Stock Exchange, Tokyo Stock Exchange, and the Forex Market. The truth will stare back at you with stark reality.

You will be shocked to know that the value represented by the currency market is more than 200 times greater and more significant in size! It is massively indescribable! But don’t give up just yet, there is something else you must know.

That ridiculous amount of $5 Trillion is a representation of the world’s foreign exchange market put together. By the time you take out the share of retail traders (you and I), which trade the spot market worth around %1.8 Trillion, the previous $5.Trillion figure would no longer be feasible.

Thus, it is clear that while the forex market is without controversy huge, it isn’t that huge as some people would make you believe. Over here, we don’t fancy exaggerations; we prefer to keep it real like the face of your palm.

Alright! Do you think or feel like you already have all the information worth knowing about the fore market? Well, we are just at the Genesis of it.

Why don’t you hang around with us as we take you through to Revelation—the next chapter where we are going to bring to light the exact commodity or whatever that is being traded in the gigantic ship of the forex market?

Just stay tuned to this thread.  

  • BrokerEUR/USD
    IG 0.6pips (fixed) margin: 3.33%
    FX Pro 0.91pips. (variable) margin: 3.33%
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