Currencies

The forex market, also known as the foreign exchange market or FX, is the market where currencies are traded. It is the largest and most liquid financial market in the world, open 24 hours a day, five days a week. In comparison, the New York Stock Exchange has a daily transaction turnover of about $169 billion dollars, while the Forex market has a daily turnover of about $5 trillion!

A CFD is a financial instrument that allows traders to invest in an asset class, namely currency pairs, without actually owning the underlying asset. CFDs offer traders the opportunity to profit from price movements – rising or falling. It is calculated as the movement of an asset between entry and exit in a transaction, calculating only the price change without taking into account the underlying value of the asset. CFD on currency pairs works as a contract between two parties (buyer and seller). It states that the seller will pay the buyer the difference between the current value of the asset and its value at the “contract term”. If the difference is negative, the buyer pays instead of the seller.

There are several major players in the forex market including central banks, commercial banks and investment banks. This is called the interbank market because they are constantly interacting with each other on their own behalf or on behalf of their clients. However, there are other participants in the forex market, which also include large multinational corporations, global money managers, registered dealers, international brokers, futures and options traders and individual investors.

It depends on how you intend to trade, whether you use leverage and how much capital you plan to risk. You can start by investing $50 or $50,000 – there is no limit to the amount. However, you must remember that increasing leverage also increases your risk level. Ultimately trading comes down to a trader’s risk tolerance and risk management. Skilled traders can minimize risk and maximize profits through careful analysis, developing an effective trading strategy and prudent money management.

Forex is open 24 hours a day, 5 days a week, and currencies are traded worldwide among the major financial centers. The market opens on Sunday at 22:00 GMT, and closes on Friday at 22:00 GMT. Specific hours of each center:

Sydney — 22:00 — 7:00 GMT

Tokyo — 12:00 — 9:00 GMT

London — 8:00 — 17:00 GMT

New York — 13:00 — 22:00 GMT