I hear people talking about FX everywhere. What exactly is FX?
Well, FX is actually the shorthand which is used for foreign exchange. The foreign exchange market is incredibly unique for a lot of reasons. It is a market where you can purchase and sell currencies every single day. It is open for five days a week, 24 hours a day. It does not function for two days in a week. We have traders from all around the world. The entire market is existing in an intangible location, which means it is existent electronically. It also happens to be the largest financial market in the world. There is a reason why it is the largest financial market in the world. The sheer size of it, the trading volume is something that makes it so monumental. The foreign exchange market actually averaged at $6.8 trillion per day, back in April in 2019.
Now that the coronavirus pandemic has confined people to close quarters and people are spending more time on the internet, we can expect the number to have increased. It means that the market had transactions that went north of $6.8 trillion, in just 24 hours.
This was according to the bank of international settlements, and we can trust them to give us dependable and accurate information. I will also have you know that the largest foreign exchange markets in the world are located in New York, London, Singapore, Hong Kong, Sydney, Tokyo and Frankfurt.
I am sure you have asked yourself the question, “How do I trade in forex?”
Well, it is accessible and easy. The foreign exchange market, as I have mentioned above, is open 24 hours a day across all major financial centres, in the globe. This would mean that you can purchase or sell currencies at any time of the day, whenever it suits you. If we are looking at it from a historical standpoint, foreign exchange trading was only limited to large government bodies, multinational companies, and hedge funds. But, in today’s growing economic standards, trading currencies is incredibly easy and can be done with the click of a button or just a touch of a display. Accessibility is definitely not an issue, and that would mean that anybody can do it. A lot of investment firms, financial institutions and banks have started offering the chance for people to open accounts and to start trading currencies if they wanted to.
When you are trading in the foreign exchange market, you are purchasing and selling currencies of a particular country. For example, you would be buying the USD, and you would be selling it as GBP. You need to know that there is no physical exchange of money, from one hand to another.