What is Forex Trading?

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What Is Forex?
The foreign exchange market is the "place" where currencies are traded. Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business. If you are living in the U.S. and want to buy cheese from France, either you or the company that you buy the cheese from has to pay the French for the cheese in euros (EUR). This means that the U.S. importer would have to exchange the equivalent value of U.S. dollars (USD) into euros. The same goes for traveling. A French tourist in Egypt can't pay in euros to see the pyramids because it's not the locally accepted currency. As such, the tourist has to exchange the euros for the local currency, in this case the Egyptian pound, at the current exchange rate.

The need to exchange currencies is the primary reason why the forex market is the largest, most liquid financial market in the world. It dwarfs other markets in size, even the stock market, with an average traded value of around U.S. $2,000 billion per day. (The total volume changes all the time, but as of April 2004, the Bank for International Settlements (BIS) reported that the forex market traded U.S. $1,900 billion per day.)

One unique aspect of this international market is that there is no central marketplace for foreign exchange. Rather, currency trading is conducted electronically over-the-counter (OTC), which means that all transactions occur via computer networks between traders around the world, rather than on one centralized exchange. The market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney - across almost every time zone. This means that when the trading day in the U.S. ends, the forex market begins anew in Tokyo and Hong Kong. As such, the forex market can be extremely active any time of the day, with price quotes changing constantly.

Spot Market and the Forwards and Futures Markets
There are actually three ways that institutions, corporations and individuals trade forex: the spot market, the forwards market and the futures market. The forex trading in the spot market always has been the largest market because it is the "underlying" real asset that the forwards and futures markets are based on. In the past, the futures market was the most popular venue for traders because it was available to individual investors for a longer period of time. However, with the advent of electronic trading, the spot market has witnessed a huge surge in activity and now surpasses the futures market as the preferred trading market for individual investors and speculators. When people refer to the forex market, they usually are referring to the spot market. The forwards and futures markets tend to be more popular with companies that need to hedge their foreign exchange risks out to a specific date in the future.

What is the spot market?
More specifically, the spot market is where currencies are bought and sold according to the current price. That price, determined by supply and demand, is a reflection of many things, including current interest rates, economic performance, sentiment towards ongoing political situations (both locally and internationally), as well as the perception of the future performance of one currency against another. When a deal is finalized, this is known as a "spot deal". It is a bilateral transaction by which one party delivers an agreed-upon currency amount to the counter party and receives a specified amount of another currency at the agreed-upon exchange rate value. After a position is closed, the settlement is in cash. Although the spot market is commonly known as one that deals with transactions in the present (rather than the future), these trades actually take two days for settlement.

What are the forwards and futures markets?
Unlike the spot market, the forwards and futures markets do not trade actual currencies. Instead they deal in contracts that represent claims to a certain currency type, a specific price per unit and a future date for settlement.

In the forwards market, contracts are bought and sold OTC between two parties, who determine the terms of the agreement between themselves.

In the futures market, futures contracts are bought and sold based upon a standard size and settlement date on public commodities markets, such as the Chicago Mercantile Exchange. In the U.S., the National Futures Association regulates the futures market. Futures contracts have specific details, including the number of units being traded, delivery and settlement dates, and minimum price increments that cannot be customized. The exchange acts as a counterpart to the trader, providing clearance and settlement.

Both types of contracts are binding and are typically settled for cash for the exchange in question upon expiry, although contracts can also be bought and sold before they expire. The forwards and futures markets can offer protection against risk when trading currencies. Usually, big international corporations use these markets in order to hedge against future exchange rate fluctuations, but speculators take part in these markets as well.

Note that you'll see the terms: FX, forex, foreign-exchange market and currency market. These terms are synonymous and all refer to the forex market.
 

StuartLaw

Newbie
Nov 19, 2015
135
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Forex trading ek international business ha jo mainly currency k bech hota ha har country ki jo Foreign Exchange bhe kehlata ha. Forex ek boht hi behtreen work ha aur khas tor py agar woh OctaFX jese broker k sath ho. Mai ya company k sath peechle 3 saal se work kar rah hon aur har tarike se benefit horah ha khas tor pay in k low spread ki waja se jo sirf 0.2 pips ha aur high leverage up to 1.500 bhe included ha.
 
Jan 8, 2016
280
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Forex jo ha foreign exchange ko bolte hain jis ka matlab ha koi bhe cheez jese currency/commodities/indices ki dealing aur ya sab broker k zariya hota ha. Hume is baat ka boht dhyan rakhna chaiya k broker regulated ho warna agar humne galat broker ko join karlia to sari investment ja sakti ha aur kuch hi time pehle mere dost ne Etoro ko join keya tha aur in ka itna ajeeb system tha k sare paise lost hogaye is k.
 

StuartLaw

Newbie
Nov 19, 2015
135
2
68
Farhan bilkul theek kaha Forex mai broker ki boht hi emiyat ha aur is waja se mai sirf OctaFX broker k sath kam karta hon. Ya Pakistan ka sab se popular broker ha aur is hi waja se inhe recently award bhe mila Best Islamic Broker ka jo ise pehle boht hi kam companies ho mila ha to is waja se ink sath kam karna ka matlab ha confirm profit kamana to is hi waja se mujhe koi masla bhe nahi hota.
 
Jan 8, 2016
280
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716
Forex trading itna bara business ha k humari 10 zindagi bhe kam pare gi ise puri tara learn karne mai to hume koshish karnie chaiya k jo zaroori ha hum wohi learn karein aur is hi waja se mai step by step learn karta hon aur FreshForex broker ki waja se ya sab kafi asan ha khas tor pay in k step by step educational guidance ki waja se.
 

DavidPiccolo

Newbie
Sep 13, 2015
198
1
318
Forex trading boht hi acha aur mazedar business ha magar sirf 2-3 lines read kar k ise nahi samjha ja sakta balke hume puri tara se aur pure tarike se karna hoga tabhi ja kar hum yahan kuch kar sakein gay agar humne ise sahi tara se nahi keya to cheze muskil hojai gi to is lia mai samajhta hon hume sahi tara se learn karna hoga. Mere lia muskil nahi ha kiu k mere broker OctaFX k sath mai bar bar practice kar sakta hon in k demo contest mai aur prize bhe jeet sakta hon.
 
Jan 8, 2016
280
0
716
Forex trading ek boht hi ala tareen kam ha magar agar hume ya bhe sahi tara se karna ha to hume hard work karna hoga tab hi ja kar hum yahan acha kama sakein gay. Forex trading agar apne aise hi start karli jese mere dost ne ki to scam ho sakta ha. Ise 1k se zada ka scam hua IronFX se to aise brokers se to boht hi zada bach k rehne chaiya.
 

DavidPiccolo

Newbie
Sep 13, 2015
198
1
318
Forex koi bacho ka khel nahi ha jis ko banda 1-2 din mai samajhle, ise agar samajhna ha to boht time lagta ha. Tabhi hume puri mehnat aur time de kar ya kam karna chaiya na k jald bazi mai. Filhaal mai OctaFX broker k sath kam kar rah hoon jahan mujhe boht zada faida milta ha in ki service aur facilities ki waja se jis mai bonus, rebate swao free account au raise boht se features shamil ha jis se kam karne mai aur bhe asani hoti ha.
 

NoumanRiaz

Newbie
Feb 16, 2016
33
2
158
Forex trading ek boht hi bara aura cha business ha agar hume is mai success hasil karnie ha to hume sahi tara se kam karna hoga proper strategy se tab hi ja kar hum kuch hasil kar sakein gay. Filhaal mai Alpari k sath kam kar rah hon aur in k sath har cheez mere lia boht hi zada asan ha khas tor pay in k http://alpari.com/hi/analytics/fxwirepro/ section ki waja se jis se mujhe market ki updates milti rehti ha aur mai sukoon se kam kar sakta hon.
 
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