What is forex
The foreign exchange market or foreign exchange trading All of this falls under one name, which is “FOREX” The word forex is an abbreviation for the term Foreign Exchange Market, and this means the foreign exchange market, as it is symbolized by the abbreviation FX.
Forex is one of the most famous financial markets around the world, as it is a huge financial market in which currencies are traded between millions of investors, banks, investment funds and countries, where these operations are used for several purposes, the most important of which are: taking advantage of changing currency exchange rates and differences and making a profit.
Forex trading has spread due to the terrible technological development that scientists have reached, especially after the spread of the Internet and modern means of communication in almost every home. As for the Forex market, it is a decentralized market that has no geographical boundaries.
How did the forex markets start?
Forex trading relied on the principle of the barter system, which was in the past before the invention of currencies, where ancient people practiced the trading process by bartering goods with each other due to the lack of money or banknotes approved at that time.
And soon the science was developed so that people turned those media used in the barter process, including gold, silver and precious metals, to the use of paper currencies, and this was a new beginning for the emergence of money and currencies that we know now.
How much is the trading volume in the forex market?
The Forex market is one of the largest financial markets in the entire world in terms of liquidity and the volume of trading in which it takes place. Forex cannot be compared to any other financial market in terms of size, such as stock exchanges and others.
This huge volume of liquidity in the currency market is due to the presence of different categories of traders and investors such as major investment banks, in addition to the development of means of communication and technology via the Internet and the use of financial facilities provided by trading in forex, and this was what always attracts more investors to these markets.
Forex advantages
- Great liquidity and high trading volume.
- The forex markets enable you to trade 24 hours a day, 5 days a week.
- Ease of counting currency news and trading correctly.
- Making a profit during ups and downs in currencies.
- The possibility of trading with small amounts at the beginning and this is useful for beginners.
- The ease of opening a forex account and the simplicity of its main destination.
Disadvantages of the currency market
- Constant fluctuation in currency rates.
- High risk in currency trading.
- The weakness of the regulatory body and the supervisory side of these markets.
How to start trading currencies - the basics of trading
Currency trading, as we mentioned above, is a huge market available to everyone. You can easily start trading currencies by opening an investment account with a forex company, but you have to take into account some things at the beginning:
- First - learn the basics of trading and the most important strategies that make you money later.
- Second- learn how to use the different forex platforms.
- Third- Learn to analyze currency price movements.
- Fourth- Learning to manage capital.
- Fifth- create your trading plan.
- Sixth- You must first trade with a demo account in order to reduce the risk with your real money.
- Seventh- Choosing the best broker to enter the world of Forex and open a real account for you.