Forex Trading Simply Explained

What is Forex Trading?

Forex trading is process of buying and selling currencies online.This is the largest business ever in the world.It has daily turn over of 5 trillion united state dollar daily. It involves many peoples and many currencies. you use a currency to buy another currency and you keep a profit.The magic of this bussiness is that you play with exchange rate.

How to play with the magic of exchange rate?

Exchange rate of the currencies change over time. So lets takes example. if you buy one euro with 500 dollar then after a month when the exchange rate increases at one euro to 5009 usd. If you want to sell that usd you bought last month you will get a profit of 9 usd.The famous brick and mortar business was Bureau De Change.With advance in Technolgy. You dont need to open a shop for exchanging the currencies. All you need is the laptop, internet connection and littles deposit in your bank acccount.

Types of currencies you can trade.


that is most of traded curreny pairs. they include a usd in the pair i.e








Cross currency pairs

That is currency pairs that include usd. they are also known as crosses i.e




Exotic currencies.

Exotics are the currency pairs that include major currency and the currency from emerging economy. ie



Pips explained.

stands for percentage in point.it corresponds to the movement of one unit of the forth decimal digit in a rate . but for japanese yen pairs, a pip correspont to the movement of one unit of a second digit in a rate

for example if EUR/USD moves from 1.1050 to 1.1051 the .0001 rise is what we call a pip.

At what time Forex Trade can be done?

Forex trade operates 24 hours a day. you can trade at any time you want.

the time session of the trade is separated in sydney session,the tokyo session,the london session and the new york session.



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