Forex is the largest and most liquid financial market in the world, with trillions of dollars traded daily. As an OTC (over-the-counter) market with no centralized exchange, it is also one of the least understood. In this article we\u2019ll guide you through the key points you should know before you participate.<\/p>\n

Short for foreign exchange, forex is the backbone of the global financial system. The market showed 14 percent growth from its previous $6 trillion-plus valuation in 2019. Forex is a global currency market, the largest in terms of trading volumes and income, that revolves around speculating on the price differences between currency pairs. On the foreign exchange, traders can profit from both the rise and fall of currencies.<\/p>\n

Welcome to EBC Financial Group (UK) Ltd<\/h2>\n

Some platforms also provide automated trading systems, known as Expert Advisors (EAs), which execute trades based on pre-set rules and algorithms. One of the biggest pros of the forex market is its high liquidity. This means there is always a large amount of money being traded at any given time. This makes it easier for traders to enter and exit positions without facing much price fluctuation. Since the market is global and operates 24 hours a day during the weekdays, it provides flexibility for traders to trade whenever they prefer, no matter their time zone. The first currency in the pair is called the base currency, while the second currency is called the quote currency.<\/p>\n

How to place a trade<\/h2>\n

” We collect, retain, and use your contact information for legitimate business purposes only, to contact you and to provide you information & latest updates regarding our products & services.” In Canada, trading firms must be registered with the Investment Industry Regulatory Organization of Canada, as well as with the province in which they do business. Local indicators of a strong economy, like low unemployment or a strong manufacturing industry, can bode well for a country\u2019s currency. Also, the more a country\u2019s goods (from natural resources to manufactured products) are in international demand, the better its currency is likely to perform. A country\u2019s currency fluctuates depending on what\u2019s happening with its economy, as well as in relation to other countries and currencies. Statistics or past performance is not a guarantee of the future performance of the particular product you are considering.<\/p>\n

Role of the U.S. Dollar<\/h2>\n

This creates prospects to profit from any situation that may increase or reduce one currency\u2019s value relative to another. Forex is traded primarily via spot, forwards, and futures markets. The spot market is the largest of all three markets because it is the underlying asset (the money) on which forwards and futures markets are based. When people talk about the forex market, they are usually referring to the spot market.<\/p>\n