Largest and Most Liquid Forex market is the largest and the most liquid financial market in the world and involves the buying and selling oc currencie. The liquidty depth of Forex market hels traders to trade instantaneously without delays or waiting at te click of their mouse.
Benefits of choosing to trade Forex
1. Forex is the most liquid market with a daily trading turnover of 4 Trillion USD
2.Trading is available 24 Hrs a day and 5 days a week
3 Low transaction costs
4. High leverage: Forex is a leveraged business that makes it possible to earn good profits with affordable amount of deposit
5. Opportunities round the clock : The availability of numerous currency pairs to trade gives wider scopes to traders to spot opportunities and exploit them.
So till now we have learned the basic definition of the Forex market and that money can be made in this market, after all its a multi trillion dollar market and we need our share of profits. But is it simple to earn in Forex? Not at all, though I would not say earning is too difficult, a lot of serious work and discipline is needed so tat we can make some appreciable amount of money in the market. . In this chapter we will further discuss the following, as I promised I would nt write unnecessary junk here and waste your time as well as mine. I have the passion to write but Forex is a big market, a never ending process of learning and building up success.
1. The major and the cross pairs
2. Basic concepts of Forex trading: spreads, pips quuotes etc
Reading price ticks
Forex Quote : A Forex quote is the price of one currency in relation to another currency. Everyone knows that Forex prices are quoted in currency pairs. For a transaction to occur we will actually be buying one currency pair and selling the other like if we buy US Dlllars we will pay its price in terms of INR.
Base currency and Variable currency : As seen earlier, Forex quotes involve two currencies. The First currency is called the Base currency and the variable currency appears second. For instance in the pair EURUSD, Euro is the base currency and US Dollar is the variable currency. So we can see that in a Forex quote the price of the first currency is displayed in units of the second currency.
Bid Price and the Ask Price : When you are trading Forex with any broker and on any terminal, you will find that two price quotes are available on your trading terminal for any currency pair, one is called the bid or selling price and the other is called the ask or Buying price. The differnce beween the bid and the ask price is the Spread. The spread is the small comission charged by the broker. Take a look at the below example of GBPUSD, GBP is the base currecy and USD is the variable or quote currency.
Sprread : In the above example the difference between the bid and ask price is the spread of GBPUSD. This quote was randomly taken from exness MT4. So in simple tems we often see that the bid price is always lower than the Ask price and this difference is called the spreads or the commission charged by ur broker. Note that spreads are kept lower for Major currrency pairs, this is due to their high liquidity and trading turnover.