Investing For Beginners: An Introduction to the Stock Market, Stock Market Investing for Beginners, An introduction to the Forex Market, Options Trading by David Nelson
Author:David Nelson [Nelson, David]
Language: eng
Format: epub
Published: 2017-04-09T07:00:00+00:00
THE BASICS OF FOREX TRADING
The currency trading marketing, commonly known as the foreign exchange, or forex, market is the largest and fastest growing market in the entire world. In fact, its daily turnover is close to 2.5 trillion dollars and most of its biggest players are corporations, hedge funds, central and commercial banks, institutional investors, and private individuals.
Similar to other markets, forex trading involves goods that are traded back and forth. However, in the forex market, the goods in question are the currencies of various countries, in addition to gold and silver. For instance, you might buy pounds with the US dollar or may sell the Chinese Yuan for Euros. In simpler terms, itâs trading one currency for another.
Exchange Rates
Due to the fact that currencies are traded in pairs and one currency is exchanged for another, the rate at which they are exchanged is known as the exchange rate. The U.S. is traded more than any other currency in the foreign exchange market and most currencies are exchanged against it.
All international currencies are on a floating exchange rate, i.e. the currency price is solely determined by the forex market based on the supply and demand of those currencies, relative to other currencies. In addition to this, because the market is so large, players as large as central banks do not possess control over it and, hence, cannot manipulate the market and move prices according to their will.
Apart from this, currency is also traded in pairs. 85% of all daily transactions in the forex market involve trading of the four major currencies in four major currency pairs. These pairs are:
EUR/USD â the Euro and the U.S. Dollar
USD/JPY â the U.S. Dollar and the Japanese Yen
USD/CHF â the U.S. Dollar and the Swiss Franc
GBP/USD â the British Pound and the U.S. Dollar
Hereâs how the forex market works: if you think that, for instance, the Japanese Yen will appreciate against the U.S. Dollar, then you can exchange the Yen for the Dollar and stay in it. If everything goes accordingly, you can exchange the dollar back for the Yen and earn a profit. The first currency in the pair in question is known as the base currency whereas the second currency is the quote currency or the counter currency. In mathematical terms, the base currency is the denominator while the counter currency is the numerator.
The exchange rate indicates to the buyer how much they need to pay to obtain one unit of the base currency. Not only this, but the exchange rate tells the seller how much of the counter currency they will receive by selling one unit of the base currency.
The forex market is a crucial component of the worldwide market and is operating 24 hours a day, almost 5 days a week. Currencies are traded around the world in the major financial zones, including New York, Zurich, Frankfurt, London, Tokyo, Sydney, Hong Kong, and Paris. The market is not limited to any time zone and is active any time of any day.
Download
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.
Analysis & Strategy | Bonds |
Commodities | Derivatives |
Futures | Introduction |
Mutual Funds | Online Trading |
Options | Portfolio Management |
Real Estate | Stocks |
Rich Dad Poor Dad by Robert T. Kiyosaki(6140)
Pioneering Portfolio Management by David F. Swensen(6051)
How To Win Friends and Influence People by Dale Carnegie(4303)
The Money Culture by Michael Lewis(3816)
The Dhandho Investor by Mohnish Pabrai(3542)
The Wisdom of Finance by Mihir Desai(3504)
Liar's Poker by Michael Lewis(3200)
The Intelligent Investor by Benjamin Graham Jason Zweig(2918)
The ONE Thing by Gary Keller(2904)
Mastering Bitcoin: Programming the Open Blockchain by Andreas M. Antonopoulos(2873)
Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb(2845)
Rich Dad Poor Dad: What The Rich Teach Their Kids About Money - That The Poor And Middle Class Do Not! by Robert T. Kiyosaki(2812)
How to Win Friends and Influence People by Dale Carnegie(2780)
Investing For Dummies by Eric Tyson(2778)
How to Day Trade for a Living: Tools, Tactics, Money Management, Discipline and Trading Psychology by Andrew Aziz(2770)
Market Wizards by Jack D. Schwager(2524)
Zero Hour by Harry S. Dent Jr. & Andrew Pancholi(2522)
How to Pay Zero Taxes, 2018 by Jeff A. Schnepper(2470)
Rich Dad's Guide to Investing by Robert T. Kiyosaki(2404)
