What Is Forex Trading?

What Is Forex Trading?
Forex is the short form for Foreign Exchange. Forex is a 24 hour cash market where international currencies are traded by the brokers. The currencies are bought and sold across the market as a result of which the investment increases or decreases in value. Real – life events also affect Forex time to time.

The working of Forex is very much different from the stock markets. There is no central body governing the Forex market, it is not governed at all from any central authority. In Forex all members trade with each other based on credit deals. There are no clearence houses to clear the ambiguities and to guarantee the trading. It is somewhat hard to imagine that such a market is based on mutual trust among the members in the trade. At a time only two traders can trade their currencies. The main headquarters of Forex are London, Frankfurt, Tokyo and New York. Thus Forex is a round the clock market and it has no opening or closing rates either.

The forex has got popular lately and is a new thing for the retail traders who used to trade in the stock markets earlier. Earlier the Forex was restricted to large financial institutes and multinational corporations. But with the advent of internet Forex has gained mass popularity. Thanks to its round the clock service now many traders are shifting their bases from stock markets to Forex. Forex has surely changed the way retailers used to trade. Now everything is just a click away.