What is traded in forex?

What is traded in forex?

traded in forex

 Currencies of the major economies from the global world are commonly traded in forex market. The commonly traded currencies are grouped into major currencies, minor and cross currencies.

Like we said before, Trading forex involves the buying of one currency and simultaneous selling of another.

Traders attempt to profit by buying and selling currencies by actively speculating on the direction currencies are likely to take in the future.

The fact that forex trading does not involve exchange of physical things, it may appear confusing, right? To get to understand this, you just have to think of buying currency as buying a stock in a company or a share in another country.

The price of currency is usually a direct reflect of the market’s opinion on the current and future status of its respective economy.

Every time you place a buy of a certain country’s currency, you are speculating that its economy is doing well but when you sell back to the market hopefully you expect a profit or you expect a future fall in its economy. Every time a trade is made, there is a cost incurred known as an exchange rate.

An exchange rate is the price paid for one currency in exchange for another, it is this type of exchange that drives the forex market. Like countries, every currency has its own personality and identity.

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