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The word Forex is derived from ‘Foreign exchange’. Foreign exchange trading provides speculation opportunities and offers a great platform for gaining profits. Learning Forex trading with XFR Financial is important if you want to become a successful trader and in this article we will learn Forex trading basics.
What is Forex trading – by XFR Financial
Let us start to learn Forex trading before you invest your money with XFR Financial. It is simply the trading of currencies. Currencies always change their relative prices with one another and therefore Forex trading is done in currency pairs like EUR/USD, GBP/USD, etc. An investor, trader or speculator is the person who speculates in the fluctuations of the foreign currencies in pairs. In trading Forex, one currency is purchased and other is sold simultaneously. The trader executes the trades in this way to earn profits due to the rise or fall of the price of a currency pair.
Forex market
Forex market is a decentralized market on which all the currencies are traded. The Forex market is the largest market in the world with the daily trade average exceeding $4 trillion every day. The other markets like stocks and commodities are lower in the rank in terms of daily average of turnover. The Forex market is huge and a global marketplace which operates all the time. It just goes off on the weekends operating rest of the time. Due to the big size of the market, the prices of currencies can be observed and traded easily but no manipulation can be done.
What affects Forex trading?
An important thing when you learn Forex trading through XFR Financial or PLUS500 is to learn about the factors which affect the Forex rates. Forex rates are affected by certain events in the backyard or anywhere around the world. With such types of events the currency value tends to a particular direction often. The analysis of Forex rates on the basis of external events like Government economic policy change, interest rates, international events, socio-economic changes and others is called fundamental analysis. You will learn about this when you get a demo account at PLUS500 or some other broker.
The other side of Forex analysis is technical analysis in which the historical Forex price action is observed and on the basis of it and some tools, the future prices are determined.
How to learn Forex trading more?
We have given you a basic knowledge of Forex trading that you can use when trading at XFR Financial or any other reliable broker like FXCM, but there are many other terminologies and concepts are there which are important when you learn Forex trading. Visit websites or education centers of some good brokers (FXCM) and you will get to know a lot about Forex trading and its fundamentals. The most important thing in Forex trading is to learn some important strategies and tips in Forex trading and on the basis of it your confidence level will grow up.
