The foreign exchange market (also known as Forex) is the place where currency is traded and invested. Forex is the most liquid market in the world, with an average daily turnover of about $ 6.6 trillion . The foreign exchange market is open 24 hours a day, five days a week, which allows many amateur traders to participate.
2. Analyze the first transaction time
The first trading time in any financial market can reveal a lot of useful information about the current trading day. Pending orders placed by traders on the previous day will be executed within the first few minutes of the new trading day, which can provide you with valuable insights into the market direction.
The transaction price is usually low and the price for foreign currency investments is included. It is known as the spread, which is the difference between the purchase price and the sale price. Unlike investing in real stocks, when you invest in the Forex market you can take advantage of both rising and falling prices.
This is possible because if the price of one currency falls, it measures in another currency, which rises. This means that the price of the second increases against the first. You can open a long position if you think the price will rise or open a short position when you expect the currency pair to depreciate.
As a currency trader, you need to be aware of key factors that affect the price of currencies. Therefore, you should be up to date with the latest news and you will need to use tools such as the Forex calendar , and some traders also resort to Forex signals .
All of them will help you identify well-performing currency pairs. It is also important to note that there are different types of Forex pairs , including primary, secondary and exotic. Among the most liquid currency pairs on the market are:
EUR / USD
GBP / USD
USD / JPY
USD / CHF