The term Forex refers to the foreign exchange market, which is considered the largest financial market in the world with an average daily trading volume of approximately $5.3 trillion. Forex trading means the buying and selling of currency pairs on the so-called foreign exchange market with the aim of making a profit from price differences, which allows both individuals and institutions to exchange between different currencies.
When we talk about stocks and commodities, there is a central exchange for trading, where buyers and sellers meet for the purpose of exchange. As for forex trading, it takes place through multiple networks between banks, dealers and brokers that are connected through the are distributed around the world and therefore the trading process is not limited to the timing of a specific exchange. Here you will find more flexible working hours and offer traders the opportunity to trade 24 hours a day, 5 days a week.
But timing is not the only reason that draws traders to the world of forex, as the large volume of currency exchanges and factors affecting exchange rates make forex a volatile financial market with increased opportunities for investors to make profits. Exchange rates are influenced by several factors, including interest rates set by a country’s central bank, economic data, government policies and the volume of export demand.
Why trade forex with ATFX?
The advantages of investing in the Forex market are clear and obvious, since you are part of the most liquid financial market in the world, where dozens of foreign currency pairs are traded, and additionally benefit from the advantage of price volatility increases the profit opportunities by being able to apply your trading strategy.ATFX is the best broker for trading with low and competitive spreads and no commissions or hidden fees, so trading is based solely on the spreads between bid and ask. In addition to providing high leverage, ATFX also offers many services, including but not limited to using the STP system, and this is just a small part of the benefits you get when opening an account to trade forex and Open foreign currencies at ATFX.
What Factors Affect the Forex Trading Market?
There are many factors that directly affect the forex trading market as these factors significantly change the trading price of currency pairs as they contain strong fluctuations that affect it significantly.
central banks
monetary policy
economic events
political news
Technical and fundamental analysis
How we work with forex and how we trade it?
Foreign exchange, or “forex” for short, is a market where you can exchange one currency for another. With a daily trading volume of $6.6 trillion, the forex market itself is huge! It outperforms markets like the New York Stock Exchange (NYSE), which has a daily trading volume of just $22.4 billion.
The sheer size of the forex market attracts a wide and diverse range of participants including central banks, investment managers, hedge funds, corporations, brokers and retailers – 90% of the participants in this market are currency speculators!
So what exactly is happening in the forex market to make it so attractive to investors around the world? Imagine you want to exchange one currency for another, you are actually selling one currency while buying or “exchanging” another.
Now, the exchange rate between these two currencies is what matters to us when trading forex. The exchange rate is constantly fluctuating, and it is these fluctuations that allow market speculators to profit from trading or face the possibility of losing their investment. The reason for exchange rate fluctuations is the supply and demand for each currency!
At this point, it is important to note that while you are trading, millions of other traders are entering the forex market.
So if you “sell” a particular currency, there is a buyer for that currency somewhere else. The more people trade, the more money there is in the market, and that’s what we call “liquidity”. As already mentioned, the forex market is a huge market with millions of traders from all over the world, which is why the liquidity in the forex market is really high!
