Forex Exchange

Why is it called the Forex Exchange Market?  A market is a place where goods are bought and sold.  A Forex Market is where currencies of various countries, as well as gold and silver, are traded.  One currency is traded for another, although you are not physically buying them.  The idea is to buy currency at a low price and then sell it at a higher price, in order to make a profit.

You cannot lose more than the margin – which is the initial investment – but the profits could be unlimited.  Be warned that you do not lose more than you can afford.

There are great risks involved in the Forex Exchange Market.  For example, there are the exchange rate risks, interest rate risks, and credit risks.

Trading online in no way reduces your risk of financial loss.  These online trading platforms do not take any responsibility for your losses, so always be sure that you are not speculating with money that you cannot afford to lose.

Many trading platforms require a trader to deposit an extra margin equal to the trading margin to be used in case of a “gap” in rates.  It will be used for administration costs as well.

The US dollar (USD) is traded more than any other currency in the world, and after that are the Euro (EUR), the Japanese Yen (JPY), the British pound sterling (GBP) and then the Swiss franc (CHF).  These currencies are referred to as “majors”.  The Australian dollar (AUD) can also sometimes be included in these currencies.

Tags: currencies, Currency, exchange market, Forex, forex exchange, forex market, Trader, Trading, trading platform, trading platforms

This entry was posted on Friday, October 30th, 2009 at 7:19 am and is filed under Forex. You can follow any responses to this entry through the RSS 2.0 feed.