What is trading Foreign Exchange also known as Forex and FX?
Foreign exchange is when you purchase one currency and sell another simultaneously. Currencies are always traded in pairs. Foreign Exchange market is also known as Forex, or FX.
When is the FX market open for trading?
The Forex market is traded 24 hours a day from 5:00pm to 4:00pm eastern standard time around the world.
What are the most common currencies in the Forex markets?
The most common currencies are the US Dollar, Japanese Yen, Australian Dollar, British Pound, European Euro, Swiss Franc, and Canadian Dollar. The most common traded currency pairs: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CAD, USD/CHF
Do I need a lot of capital to get started trading the Forex market?
Generally, you don’t need a lot of capital to get started trading the currency market. Typically, most brokers will allow for you to open a mini account for as little as $300.
What is Margin?
Margin is a performance bond to ensure the performance of the terms of the contract. Margin requirements in the FX marketplace allow you to hold positions much larger than the asset value of your account, also known as leverage. Traders should note that increasing leverage may increase potential gains as well as losses on any given trade.
What are “short” and “long” positions?
Short positions are taken when a trader sells a currency in anticipation of a downturn in price. The currency that is sold is the first one listed in the pair. Long positions are taken when a trader buys a currency pair in anticipation that the currency listed first in the pair will move higher.
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