Forex Trading Basics

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Forex trading refers to trading being carried out at the foreign exchange market. It is the largest financial market in the world where over $5 trillion exchange hands daily. The ease of trading is an attractive side of Forex. It’s also attractive because it doesn’t have a lot of negative effects on their income.

It’s an over-the-counter market for all and sundry where anyone can trade in most popular currencies in the world. Banks, institutions, investors, and individuals speculate on currencies in this decentralized global market. Currencies are traded in pairs by using one to buy another with a view to making a profit. However, profit and losses are common to Forex as they are to all markets

Forex trading is also enjoying its popularity because of the flexibility of trading hours. Traders are able to buy and sell currencies every hour round the clock throughout the five business days.

And Forex also thrives as a result of trading CFDs. That’s the contract for difference basis without the buyer owning the assets.

Common Currency Pairs in Forex

The most popular currency in pairs Forex are:

EUR/USD: Euro vs US Dollar

USD/JPY: US Dollar vs Japanese Yen

GBP/USD: British Pound vs US Dollar

However, these are by no means the only currency pairs in the Forex market. Other currencies are also making their marks in the market are

AUD: Australian Dollar

CAD: Canadian Dollar

CHF: Swiss Franc

HKD: Hong Kong Dollar

NZD: New Zealand Dollar

NOK: Norwegian Krone

PLN: Polish Zloty

SEK: Swedish Krona

SGD: Singapore Dollar

TRY: Turkish Lira

ZAR: South African Rand

Any two of these currencies can combine to form currency a pair on the exchange based on market realities.

Trading in Forex is not limited to these fiat currencies. Other assets commodities are being traded in Forex. These include:

  • Crypto: Digital currency assets are being traded in most of Forex trading platforms due to its profitability. Crypto is making millionaires of Forex investors daily.

  • Stocks: A lot of renowned investors, such as Warren Buffet, have made a lot of money from buying and selling stocks. Forex platforms provide a good opportunity for profiting from trading in stocks.

  • Commodities: Commodities are highly traded in Forex. Notable among those commodities are cocoa, coffee, crude oil, and metals. The key to making good money from trading these commodities at Forex is the understanding of their fundamentals including factors affecting their price.

You can consider including Forex trading in your list of side hustles. And don’t forget to share your thoughts with us using the comment box below


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