Have you been hearing the word “Forex Trading” so many times recently? And, as a new member of the currency market, you don't have a clue what forex trading is, then we paxforex.com/what-is-forex-trading are here to answer your question. After reading this article, you will have a clear conception of Forex.
What is Forex Trading?
The foreign exchange market or a currency trading market is a market characterized by the free exchange of currencies, that is, its primary objective is to facilitate international trade and investment. It is also known as FOREX (Foreign Exchange, which translates as the exchange of foreign currencies).
Origin of Forex
The foreign exchange market is relatively young; it began to be formed in 1970 at the time when floating exchange rates were established abolishing the fixed rate founded in 1944 in Bretton Woods that was based on the ounce of gold.
The foreign exchange market become special due to the volume of transactions, the extreme liquidity of the market, the large number and variety of the players in the market. Moreover, the time in which it operates (24 hours a day except on weekends), its geographical dispersion, the variety of factors that generate exchange rates and the volume of internationally traded currency currencies made it more interesting.
How it Works
In this physical or virtual space, the price of each currency denominated exchange rate is fixed. This quote depends exclusively on the offer and demand of the participants.
It should be noted that in forex trading, only cash is not negotiated. On the contrary, registered deposits in financial institutions or documents that grant the right to collect a quantity of money are also commercialized.
This market helps to make purchases and sales of companies from different countries without them sharing the same currency. For example, a US company is allowed to import European products and pay in euros even if the income of this company is in dollars. The currency converter is used to know the value of one currency concerning another.
The Level of Risk Involved in Forex Trading
It is true that Forex trading can be a potential source of revenue, but can’t be done without taking risks. However, with PaxForex you can minimize your risk level near to zero. A certain profit may not be guaranteed to you, but we will secure your invested money for sure.
How Get Started with Forex?
We are sure that you have already got the answer regarding “what is Forex Trading." However, another question may already have arisen in your mind, that how to get started with it.
Don’t worry PaxForex is here to help you. You can open a free Forex demo account through our website, and we will guide you to become an expert forex trader. Find us here paxforex.com/what-is-forex-trading, and get started with Forex trading.
