What is forex trading?

by keichytran 25.08.21 17:29

What is Forex?

Forex is the exchange of two different currencies at an agreed rate. In Vietnam, forex is also known by other names like fx or forex.

What is forex trading?

Forex trading is the buying and selling of currencies. The decentralized market where international currencies are traded is an over-the-counter (OTC) market, which means that transactions are fast, cost-effective, and completed with no outside oversight. Tuesday.

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Basically, forex trading is speculating on the movement of exchange prices by buying one currency while simultaneously selling another. Currency values increase (appreciate) and decrease (devaluation) relative to each other due to the impact of a number of economic, political and technical factors.

What is the forex market?

The Forex market is a global trading market , open 24 hours a day, five days a week (Monday to Friday). Forex market hours are universal, opening Monday morning in Wellington, New Zealand, before making its way to Asian markets in Tokyo and Singapore. Next, it moved to London before closing on Friday night in New York.

Even when the market is closed from Saturday to Sunday, there are always news, events happening that cause volatility for currencies at the open on Monday.

Forex is the largest market in the world

Forex is the largest market by market capitalization in the world with an average total trading volume of more than 6 trillion dollars per day . This means that the prices of currency pairs are constantly fluctuating, creating many opportunities for investors to profit from trading.

It is very rare that two coins have the same value. And it's also rare that two coins retain their relative value for long.

Whether unintentionally or on purpose, you have certainly participated in forex trading at least once in your life. For example, you are planning a trip abroad and you need to change money from Vietnamese Dong (VND) to US Dollars (USD) to spend.

On Monday, you find a currency exchange and find that the exchange rate for USD/VND is 22,000. This means that for every 22,000 VND, you will get 1 USD.

However, you did not change the money at that moment. A few weeks later, you notice that the latest rate for the USD/VND currency pair is currently 20,000. That is, just 20,000 VND now you have exchanged 1 USD - 2,000 VND less - you have been waiting for the VND to increase in value compared to the USD.