Forex trading is one of the most popular methods of investing money. It allows you to make money by investing it in forex currency pairs. It has been around since the conception of currency. The best thing about this market is that it operates around the clock now that you can access it through the internet. If the forex market is closed in one country, you will find it open in some other country. You will be surprised to know that the forex market is so big that it even dwarfs the stock market. If you don’t know, it is the biggest financial market among all that exist in the world right now.
While other markets struggle to touch the billion mark, currency trading has already crossed the $6.6 trillion mark in just one day. Yes, people from around the world traded $6.6 trillion worth of currencies with each other in a single day. When you compare these statistics to the statistics from 2016, you will notice that it is a huge surge.
How Forex Trading Works
When you talk about trading, the core methods of trading any asset are pretty much the same. You buy or sell a particular asset and then benefit from the price fluctuations. When it comes to forex market, you will always be trading currencies in the form of pairs? Why? The answer is that you will be giving one currency for another currency. If you have USD, you will be trading it for GBP, EUR, AUD or some other currency in the market. At the end of the day, you will buy one currency and give away the other currency to buy the first one. Now, that’s where you estimates, speculations, and predictions come in.
You sell the currency you have in the hopes that it will reduce in value in the coming days. So, when the price of that currency reduces in the future, you buy that currency back for much less than what you sold it for. Why did you buy it back? You bought it back in the hopes that it will now go up in its value. If it goes up in value, the units of this currency you have in your possession will increase in value. You can then sell those currency units back into the market and make profit because you will be earning much more that what you had paid to buy that currency. This is how everything works in the forex market when you look at the core of things.
Of course, that’s only a simple understanding of the market. There are hundreds of other factors that you have to pay attention to before you enter a trade. The broker you sign up with will have a spread that you will have to pay when you buy or sell a currency. In addition to that, there are commissions for you to pay.
A Little about Currency Pairs
Before you jump into forex trading, you will have to know about the different types of currency pairs that exist in this market. So, there are many countries in the world and each country has its currency that you can trade for another country’s currency. However, you want to focus on a few currencies because that makes it easy for you to focus on a particular set of pairs rather than keeping in mind the rates of so many. Not to mention, you can be expert in only a few assets, but when you try to master them all, you only become an average trader in them all.
So, when you talk about major currency pairs, they are the currency pairs that have USD in them. There are many currencies that you can trade against USD. Do keep in mind that these currencies are the most liquid currencies you can find on the forex market. You can trade them just about any time you want without any difficulties. Some examples of major currency pairs include USD/CAD, AUD/USD, GBP/USD, USD/JPY, etc.
On the other hand, you have minor currency pairs, which can be any currency pair that does not have USD in it. Here, you can already predict the power of the USD. So, you can trade British pound against the dollar from Canada, and that would make the GBP/CAD pair. You also have other pairs like CHF/JPY, EUR/GBP, etc. Lastly, you have the exotic currency pairs. These pairs can be extremely volatile because of their nature. In this pair, you pit the currency of an underdeveloped or a developing country against the currency from a developed country. GBP/ZAR, JPY/NOK, USD/HKD etc. are some great examples of exotic currency pairs.
Why You Should Trade Forex
Forex trading is one of the most popular formats of trading around the world. You have millions of traders from around the world who have signed up with online forex brokers to trade on their trading platforms. Forex currencies are easy to understand and just about everyone knows how they work. The forex currency exchange market has been on the rise since forever. The big rise can be seen when you compare the size of the market in 2016 and 2019. It means when you trade forex, you will be a part of a strengthening market.
In addition to that, companies can shut down and disappear and hence their stocks too. However, this same thing rarely happens to countries. For as long as there are countries, they will have currencies as well. Your investments are future-proof in this market.
Why Trade with Global CTB
Global CTB will provide you with all the necessary tools, indicators, signals, and a solid trading platform that you need for reliable forex trading. You won’t find a lot of online brokers that offer you great leverages on forex trading and make it easy for you to sign up with them. However, Global CTB makes things easy for you by offering you the options signing up with a trading account that suits your needs and fits your budget. It does not matter how easy forex trading sounds, you have to be wise in your choice of the online forex broker.