While other markets brag about trading billions of dollars per day, Forex trading involves the movement of massive amounts of currency from one nation’s bank to another.
As a result, the Forex market is the only one that can claim trades in the trillions of dollars occurring per day. This massive volume goes to show just how active the markets are during trading days.
So where are currencies traded?
Currency trading is done on the Foreign Exchange, through the account you have at one of the brokers like XFR Financial Ltd (XTrade). Forex markets mainly focus on 8 main currencies, which are called “The Major Currencies.”
These eight are:
– The United States Dollar
– The Canadian Dollar
– The Japanese Yen
– The New Zealand Dollar (abbreviated NZD)
– The Australian Dollar
– The Euro
– The British Pound
– The Swiss Franc (abbreviated CHF – this is a tricky one)
Well over 95% of all currency trading involves these currencies. Any foreign currency trading that involves a currency that isn’t one of these eight is referred to as a minor currency trade. This even includes currencies like China’s Yuan or Russia’s Ruble.
Trading is done in currency pairs with one currency being used to buy or sell another. Being on the correct side of the price difference is how a trader makes money.
How is foreign currency trading done?
Every trade in foreign currency trading online is completed through a Forex broker. A broker is what allows one currency to be traded for another.
Since one person is doing some buying or selling, someone has to be on the other side of that transaction to make it work. This is a role that the brokers like XFR Financial Ltd (XTrade) play.
A trader needs to have a broker, and they will use that software in order to trade. Once an account is made, the broker automatically takes the other side of any transaction the trader makes. This is how there can always be a partner for any given currency pair trade.
This is the same software where you can set trailing stops, follow the movement of the currency pair with constantly updating charts, and cash out a trade, as well. Meanwhile, perhaps you fancy a punt with a Betfair promo code.
Best way to learn foreign currency trading?
Education is power. Reading books, following markets, and understanding how each major financial report effects certain currencies will definitely help with future trades, but nothing replaces working with practice software from XFR Financial Ltd (XTrade).
These use practice money but the real life up to date market reports from whatever is taking place. Basically, when you use a demo account at XTrade, your trading strategies and risk management are tested against actually real life markets – not facsimiles created to make trading seem easier than it really is.
There’s no question that when it comes to foreign currency trading, there are many things that even experienced traders need to learn before jumping in feet first. The Forex is unlike any other market in the world and must be treated accordingly.