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What is Forex

Foreign exchange, more usually identified as Forex or FX, is the act of buying and selling currencies with the intention of generating profit of the alteration in their price. As one of the major markets globally, there are greater liquidity in the said market. Hence numerous investors fascinated by the forex market, both beginners and experienced investors in the field.

The partakers in the Forex market consist of banks, corporations, influential investors, hedge funds and individuals. The system that it follows is much similar to the practice of currency exchange at physical establishments such as airports and banks, where you can interchange the currency you transact with for the resident exchange.

The Forex Market availability is 24 hours a day 5 days a week, which of course allows traders to transact globally with the support of global news events as they occur.

Forex Trading Hours

Timezone (Summer)EDTGMT
Sydney Open/Close 6:00 PM 3:00 AM 10:00 PM 7:00 AM
Tokyo Open/Close 7:00 PM 4:00 AM 11:00 PM 8:00 AM
London Open/Close 3:00 AM 12:00 PM 7:00 AM 4:00 PM
New York Open/Close 8:00 AM 5:00 PM 12:00 PM 9:00 PM

Currency Pair

A currency pair is the quote of the comparative price of a currency unit alongside the unit of another currency in the foreign exchange marketplace.

Base Currency

The base currency is the exchange beside which exchange rates are mostly estimated in a specified nation.

Bid Rate

A bid price or rate is the uppermost price that a purchaser (i.e., bidder) is ready to pay for a good. Commendably, the bid price is the rate that the investor will develop for a short position. The bid rate is constantly lesser than the ask value. The variance between the “ask and bid” price is termed the spread.

Ask/Offer Rate

Ask price or rate is likewise identified as the offer price, offer, asking price, or simply ask. This is the price a seller declares that they will agree to take.

Bid/Ask Spread

A bid-ask spread is the quantity by which the ask price surpasses the bid price for an asset in the marketplace.

High/Low

The High/Low is the highest traded price and the lowest traded price of the commodity or currency that over the period of a trading day.

Pip

The term '"pip" is an abbreviation for "percentage in point," even though it's occasionally called a “price interest point”. Pips signify the lowest crusade that a currency pair can mark. This is characteristically equivalent to 1 basis point, but not continuously.

Spread

The variance between the “ask and bid” price is termed the spread. Spread is conventionally signified in pips – a percentage in point, denoting a fourth decimal place in currency quote.

Stop Loss

Stop Loss is the relation to an order to sell a security or commodity at a definite worth in order to regulate a loss.

Leverage

Leverage includes the borrowing of a certain amount of money required to invest in something. In the case of forex, that money is habitually on loan from a broker.

Take Profit

A take profit is the quantity of money you expect to create in a trade. In your order, you identify a price at which you will conclude your trade.