Forex market can be defined as the global currency market where one currency is traded for another to make money online. You may know that this market is decentralized which means there is no central exchange; hence, currencies can be bought and sold from anywhere around the world. It is the world’s largest exchange market which operates 24 hours a day. Profit or loss is determined by the difference between the selling and the buying prices of the currencies. The currency prices fluctuate depending upon the prevailing global economic conditions. While making the forex transactions, markets expectations and movement of these major currencies are taken into account.
Forex trading terminologies: Majors, participants and Forex trading Systems
The market uses different terminologies that are mentioned below:
In currency trading, American dollar, Australian dollar, Canadian dollar, Swiss francs, sterling and Euro are considered as the most liquid currencies so they are called as Majors.
The market participants are the ones who buy and sale currencies. This market has different participants such as individual investors, banks, insurance companies, corporations and large financial institutions.
The currency trading system displays all currencies with their current rates. These software also provide useful tools and analysis to make investment decisions wisely. Some of the widely used trading Systems are Metrader, Forex Funnel, Turbo and Forex tracer. You can use this software at the trading room of your forex brokerage or house, or download it on the home computer.
Role of forex brokers
It is the unique nature of the forex market which can bring large profits and losses overnight. Therefore, if you are new in the currency trading, you should start with small amount to minimize the risk. Meanwhile, you should avail the services of an experienced broker in order to take a good position to make money in fx trading.
Your broker has an important role to play. There is a large number of forex brokers that can help you in forex trading. First of all select the most suitable brokerage house near you to open a trading account. After the account is opened, you will be issued a username and password; hence, you will become eligible for currency trading. Forex brokers do a number of things for their clients. Also, you can trade currencies from anywhere around the world by logging in though your username and password. The role of forex brokers is very important due to the following reasons:
• Trading rooms of forex brokerage houses are the best place for the new forex traders who are willing to learn tricks of the trade and gain effective information to understand trade setups.
• They provide guidance, technical support, in-depth market analysis so that their clients trade currencies in the forex market as professionals.
• Meanwhile, your forex broker can manage the accounts and conduct forex trading on your behalf.