What is Forex Trading?

The foreign exchange (Forex Trading) market is undeniably the biggest and most liquid financial market in the world. It surpasses even the stock market in terms of trading volume of around $5 trillion per day so it is no mystery why people are looking to get a slice of that pie.

Forex trading is the buying and selling of one currency for another in order to profit. Trading currencies is rather simple, buying a currency at one price and selling it at a higher price. This is achieved by speculating if the price of the currency will go up or down.

The forex market is becoming more and more popular as time goes on. This market is not for the faint of heart as it involves a lot of risks.  However, it is also a very interesting business to enter because of the many potential advantages it holds.

How to trade Forex?

When trading forex, you buy a currency by using another. All forex trades involve currency pairs because you are betting the value of a currency against another. For example, the USD/EUR pair means you are buying USD by using EUR. When selling the pair, you are buying EUR by using USD.

Currencies are grouped into pairs to show the exchange rate between the two currencies; in other words, the price of the first currency in terms of the second currency. For example, in EUR/USD, EUR is the ‘base’ currency and USD is the ‘counter’ currency. Some commonly traded forex pairs are EUR/USD, USD/JPY and EUR/GBP.

What affects Forex prices?

Forex prices are affected by a number of different factors, from international trade or investment flows to economic or political conditions. This is what makes trading forex so interesting and exciting. High market liquidity means that prices can change rapidly in response to news and short-term events, creating multiple trading opportunities for retail forex traders.

The prices of currencies are continually increasing and decreasing due to the following factors:

  • Economics and geopolitics
  • A country’s monetary policy
  • Natural disasters
  • Currency intervention

Forex Trading with FTO Capital

FTO Capital is the best choice if you are looking for a platform that provides excellent service, diverse opportunities and the flexibility to suit your needs. If you want to diversify your portfolio and experience trading in the largest financial market in the world, try trading forex with us today!

FTO Capital offers an array of currency pairs available for trading and a plethora of assets you can invest in. We provide optimum forex trading experience with advanced technological tools that are fit to all kinds of traders. Open an account now and make the most out of the forex market. You could also try signing up to our risk free demo account and experience the thrill of investing in the forex market without losing real money.