Forex Trading: The Purchase, Sale, & Exchange of Currencies

Forex Trading: The Purchase, Sale, & Exchange of Currencies

The Forex markets are the markets which dictate the foreign exchange rates. Sometimes simply called the currency market, or FX, this market is all-inclusive of purchase, sale, and exchange of currencies at either the current price or predetermined prices. In a size to size comparison to all other trading market based on volume, the Forex market is by far the largest. It is also considered the most liquid market in the world.

Large international banks constitute the majority of the Forex markets; however, it should be clarified that these markets are working on multiple levels and utilize a relative value for currency as opposed to one that is absolute. Based on the sovereignty issue that comes into play when dealing with two currencies, there is very little, if any, regulation on the Forex markets. Other than on the weekends, these markets feature continuous 24 hour per day operation.

The Forex markets began in the 1970s as countries began to transition to floating exchange rates following the previously set rates of the Bretton Woods fixed system. The market for the Euro has experienced considerable growth since its initiation in 1999. The primary trading centers are New York City and London, with Tokyo and Singapore being highly noteworthy, as well. The constant time fluctuations around the world allow for continuous trading: as the Asian trading sessions culminate, the European sessions are getting started, followed by the North American time frames, and circling back to the Asian in a repetitious pattern only interrupted by the weekend.

Trading precious metals has also become exceptionally popular. Gold, silver, palladium, copper, and platinum are among the most commonly traded, but are growing in popularity, as well. Precious metals have value in a variety of applications. Not only are they known for their decorative qualities and their use in art, but they are also each used in manufacturing and even electronics. Metals have been the standard backing government-issued money for centuries upon centuries, and they were also used as one of the world’s initial currencies. They can be traded in a variety of ways and some options for trading even offer an option that resembles an insurance policy in order to soften the blow of a largely misplaced trade.

With internet so incredibly widely available and trading apps being offered for download on phones, tablets, computers, and a variety of devices, trading has never been easier. While it is strongly recommended that each individual delving into the trading markets of metals or Forex take some time to educate him or herself on the system and how it works, there are few barriers preventing the entry of the common citizen into trading. Fortunes have certainly been made in the mildly regulated Forex markets and there is the unique beckoning of a round-the-clock time frame in which to trade. Finding a good app that offers education and up to the minute data is one key to success. Several of the currently available apps also offer a practice trading element that can be utilized to ensure that the basis for your trading strategy and implemented instincts will actually serve you well in a real-time application.

While Forex and metal trading may not be right for everyone, they do offer an opportunity to engage in trading with a relatively low investment to start, a wealth of information at one’s fingertips regarding the markets, and time flexibility for those working a full-time job when other markets may not be easily accessible.

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