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What is Forex?
Forex means Foreign Exchange Trading. It is a business of currencies being held worldwide. Financial institutions play the role of the trading centers among the traders, e.g. EBS and Reuter’s dealing 3000. It was started in 1970s. Forex trading can be distinguished from other trades on the following grounds:
It is the biggest market and dealt internationally. It is active all the day and closes on the weekends only. It mainly depends upon the fluctuating rates of the currencies. The marginal rate is less than the other financial markets and Leverage can affect the margin rate. It is different from the Stock Exchange Market since the marketer can directly handle the business with the broker solely.
The parties of this business are divided into several classes: Interbank (the largest financial institution around the world), Spreads (Traders who are concerned with the bid price and the ask price), commercial banks, corporations and retail marketers, speculators, etc.
The investor has to predict accurately the ups and downs in the values of the currencies in the coming future. However, now, there are several new and advanced technologies used in the Forex Market , e.g. The Lagging Indicator that can guess the fluctuating rates of paired currencies in anticipation. Another tool is a Robot Trading System. It is software that guides you when to start and stop trading keeping in view the market conditions.
Scalping is also in practice by the Forex businessmen and they make their business decisions accordingly. Price Action is a very useful method that estimates the price without any indicator. It makes you satisfied and contented with the deals. You must be careful regarding the Forex trading scams. It is definitely a beneficial and sound business, but bewares of the Automated Forex Robots. Sometimes, they stop working and you cannot notice. Afterall, they are machines and cannot perform like a human.
This market is open all 24 hours. Here’s an example of Forex Business. Say you belong to England and want to purchase rice from Japan; you cannot deal in your own currency rather you will have to exchange your currency with the Japanese currency that is Yen. If you travel to the United States, you will have to pay in USD because it is their local currency accepted by them, not in British Pounds. So the currencies will be exchanged. Hence, this is how Forex works.
Forex Tips and Tricks
Today's Tip :
Any attempt to trade without analysis and studying the market is equal to a game. Games are fun except when you lose real money...

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