Trading in the foreign currency market can be very lucrative and tasking. It can also be traded in under several platforms. It doesn’t matter where your choice lies, they all serve the same purpose of providing with a forum to trade in currencies. While the offline forex trading may not require the basic knowledge of the internet, trading in forex online requires you to have a good knowledge of the internet laws and regulations in your region and to also have a basic idea of the internet.
The foreign exchange market with a trade volume of more than $5.3 trillion per day, has been regarded as one of the largest financial markets in the world. When this is compared with the trade volume of the New York Stock Exchange, currently just $22.4 billion per day, you can understand the enormity of the FX market. While these figures look quite overwhelming, it could however be deceiving since it relates to a market which operates on a global scale. When broken down, these figures usually occur in smaller quantities.
The foreign currency market is characterized by several terminologies and factors. These are what ultimately defines the forex market. This article shall only take the most important ones into consideration.
- FOREX BROKERS AND TRADERS
A forex broker is usually a middleman who helps in connecting the forex trader to the forex world. They provide they provide the trader with trading platforms, information and also education as the case may be. A forex trader is someone who invests in the forex market and expects to make profits from the investments.
- EXCHANGE RATES
This refers to the total amount of money in one currency that needs to be given up in order to obtain its equivalent amount in another currency. This usually comes in currency pairs i.e. USD/CAD, USD/EUR and many others. This is the major determinant and indicator in the forex market. The entire market trend and behavior depends on it. Some of the factors which affect the exchange rates includes but are not limited to the following; the economy, the forces of demand and supply, commissions and leverages.
- CHARTS AND GRAPHS
The exchange rate data are displayed in the form of graphs and charts. These are usually displayed based on time frame and they contain valuable information concerning the latest market trends and exchange rates at the time of study. These are used by forex traders and brokers for studying the market trends and predicting future outcomes of the market.
- LEVERAGES AND COMMISSION
These are amounts charged on currency pairs while trading. Depending on the stock broker, these values vary from one place to the other and it is used by the traders to choose the best forex broker for their business.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.