What Is the Forex Market? - Regal Core Markets

1
What is Foreign Exchange Trading?
2
What Is the Forex Market?

• Forex Market refers to the foreign exchange
  market and this is where currencies from all over
  the world are traded. Currency is a key part of
  global functioning because without it, no form of
  foreign trade or business can take place. 
• Think of it this way if you live in the United
  Kingdom and want to buy Champagne from France,
  you have to pay for his product in euros (EUR),
  and this means your U.K importer will have to
  exchange the equivalent value of British Pounds
  (GBP). Currencies are exchanged on a daily basis
  - through travel, trade, etc.
• A fascinating thing regarding this international
  market is the fact that there is no centralized
  location for foreign exchange. In fact, currency
  trading takes place electronically, through
  computer networks and between traders from all
  over the world.
• Regal Core Markets reports that in comparison to
  other types of financial exchanges, Forex appears
  to be the most stable because it has the highest
  volumes of traffic and facilitates more or less
  4 trillion daily transactions. The market is
  open 24 hours a day, five and a half days a week,
  and currencies are traded worldwide, according to
  Investopedia, in the major financial centers of
  London, New York, Tokyo, Zurich, Frankfurt, Hong
  Kong, Singapore, Paris and Sydneyacross almost
  every time zone. This market is constantly active
  and price changes occur at a rapid rate.

3
Currencies Traded in the Forex Market

• In Forex, Regal Core Markets reports, eight
  currencies are exchanged in significantly big
  volumes. Hence, they are referred to as Major
  Currencies. They are the following
• USD (US Dollar)
• GBP (British Pound)
• EUR (European Euro)
• JPY (Japanese Yen)
• CHF (Switzerland Franc)
• CAD (Canadian Dollar)
• AUD (Australian Dollar)
• NZD (New Zealand Dollar)
• These arent the only currencies that are traded
  in the foreign exchange market. There are
  countless options for traders to try out, but
  these are simply the ones that are most
  well-known and are traded more often. Currencies
  are not traded alone, but rather in a pair.
  Traders will hold different currencies and pair
  them off to do an exchange.

4
Understanding Exchange Rates

• The term Exchange Rate refers to the amount by
  which one currency is traded for another. This
  rate is dependent on the current rate provided
  within a market .Traders make a profit through
  this when they do several exchanges across
  markets, days, and timeframes.
• For example, one trader may have an amount of
  USD that he wants to trade for EUR. The trader,
  then, finds the current exchange value for both
  USD and EUR. The amount of EUR he makes out of
  the exchange shall be based on the current rate
  in the specific market at that particular time.
• If he wants to gain more profit for his money,
  he may want to find another market with a higher
  exchange rate for the USD he has at the time. If
  he trades his USD for EUR in that particular
  market on that very day and time frame, he will
  make significantly more after taking advantage of
  high exchange rates.

5
Forex Trading Risks

• Forex trading, while beneficial for
  generating profit, can also be y and complicated.
  The international market consists of regulatory
  standards that differ at varying degrees and
  forex platforms and practices are not
  standardized. In fact, some areas in the world
  have forex platforms that are totally unregulated
  which poses security risks for all stakeholders.
  It is important that any interested trader does
  their due diligence by ensuring that the
  platforms on which they trade follow the required
  processes that make them secure, legal, and
  reliable.

6
The Forex Market Today

• During 2020, forex trading has been majorly
  impacted by the present COVID-19 pandemic. 
• Due to the forced lockdowns and necessitated
  quarantine protocols initiated by most
  governments worldwide, financial corporations had
  to reduce their business hours and enact various
  strategies to limit the spread of the virus among
  employees and clients alike. 
• These unfortunate measures led to instability in
  the Forex market and a global recession continues
  to be an imminent threat. Less liquidity is
  observed, and an increase in volatility is seen.
  But the market is back on the rise as traders
  have shifted to conducting low-risk investments,
  focusing more on the necessity of in-depth
  monitoring tools and analysis reports. 
• Interested traders should also reach out to
  reputable forex advisors who can help them
  implement secure and successful trading
  strategies. In unpredictable times as the ones we
  find ourselves in now, it is important to lean
  into the companies and leaders who are
  knowledgeably equipped for times such as this.