Forex trading is currency trading from different countries with a goal to make a profit. In this case, forex is short for Foreign Exchange (foreign exchange). An example of forex trading is buying Euro (the main European currency), while simultaneously selling USD, can be abbreviated EUR / USD.
In the shadow of a layman, the notion of forex trading is the act of exchanging money in Money Changer, which is the buying and selling of foreign currency manually done through money changer. In fact, forex trading is different from manual transactions like in Money Changer.
Generally, the purpose of someone to buy and sell money in Money Changer is because of the need to exchange currency to transact in different countries, so there is a physical exchange of money. While forex trading is done online with the aim of obtaining profit only. Need to be understood, forex trading is a business activity, investment even can be a profession.
On an international scale, foreign exchange (forex) trading is conducted by various parties, from governments, central banks, multinational companies, to certain individuals with large assets. The buying and selling of currencies between the various parties are not happening in a market with physical buildings, but in the invisible network called the “forex market”.
Along with technological developments, forex trading reaches a wider scope. Through the internet, forex trading can now be done by anyone, anytime, and anywhere. Now, everyone can trade forex. You and I can trade online forex easily and with a capital as small as 10 Dollars only.
The forex market is different from traditional markets. Because the traded currency is the market, the market (where traders/market participants make a sale) does not have a specific building, and every market player can act as both a seller and a buyer. Who are the forex market participants? very diverse: can be multinational banks, central banks, big companies, governments of any country, financial institutions, speculators, etc.
Given the global scope and culprit, the forex market is very attractive and profitable. Because of the global market, the forex market has become the biggest money-circulation market (reaching $ 4 trillion per day), and it is very liquid (can sell and buy at market prices, regardless of amount). The forex market is also open 24 hours nonstop, from Monday to Friday. So, we can trade anytime according to our free time.
Forex market can be open 24 hours a day due to the difference of time and hours of work in each financial center of the world. In more detail, trading is done in four sessions:
Australian Market (Sydney) at 05.00 – 14.00 WIB.
Then to the Asian market (Tokyo), namely Japan, Hong Kong & Singapore at 07.00 – 16.00 WIB.
Then to the European market of Germany and England (London) from 13:00 to 22:00 pm.
American Market (New York) at 20.00 – 05.00 (tomorrow).
Wherever you are, buying and selling can still be done because the forex market does not have a specific physical location, and transactions can be done online through forex trading platform. The platform can be software for PCs, browser-based web applications, or mobile apps. Thus, forex trading activities can be done anywhere and anytime.
Forex Trading Opportunity
In simple terms, the purpose of forex trading is to gain profit from rising and falling currency exchange rates. This can be achieved because the conditions and prices in the forex market move very dynamically, can change at any time to quickly respond to events whether economic, political, war, disaster, etc.
Even for areas with advanced and strong economies like the US, UK, Euro Zone, or Japan; just a little sensitive information, then the price of the currency can move up and down. This is what traders see as an opportunity and opportunity for profit.
Online Forex trading for the purpose of obtaining such benefits is done through brokers of forex brokers. The required capital is very affordable; can start from $ 10 only, or even free by using the bonus funds provided by the broker.
Forex Trading Risk
Apart from the various advantages, forex trading can be likened to a double-edged sword. Forex trading can make us rich, but also can instantly erode our capital. No matter whether forex you consider as one type of investment or as a regular trade, the obvious risk of forex trading is high.