Guide To Important Information For Beginners About Forex Trading
Forex market is the world’s largest trading market. Forex Trading means buying one currency and selling another currency concurrently. Forex is the highest liquidity and most popular market in the world because businesses, governments and others have to exchange currencies for foreign trade and international transactions. The value of daily transactions in forex market exceeds that of futures and equity markets combined. If you are interested in forex trading, then the below mentioned information in the form of Forex Trading Guide would be highly useful for you.
Constituents of forex market
Interbank market and over-the-counter market are the two levels of forex market. Interbank market is the domain of large banks which trade currencies for various purposes such as hedging, balance sheet adjustments, etc. OTC market comprise of individual traders who trade through brokers and online platforms. The Forex market trading happens on a global scale and not in a single market exchange. The Forex brokers post bids and ask prices for currency pairs on behalf of their clients.
Forex Trade is not a stock market where the traders have so many stocks to trade. There are eight major economies whose currencies are traded in the forex market. It is necessary for the forex traders to monitor the economic data of these countries everyday in order to grab the opportunity of earning interest income from these currencies. The eight major countries which form the bulk of forex trading are as follows.
- Eurozone with main countries such as Germany, Spain, Italy and France
- United Kingdom
- New Zealand
US Dollar has a share of 85% of the all Forex tradings and is the most traded currency in the Forex market. Euro has a share of 39% of the tradings while Japanese Yen has a share of 19% of the tradings.