Foreign exchange reading has always been popular, and with the advent of automated trading bots, it has become a much more widely accepted activity. This article will give you an overview of what forex trading is, how it happens, and the state of Liteforex in Thailand.
What Is Forex?
Forex is a combination of the words Foreign Exchange. It is the process of changing or converting one currency into another for the purposes of trade, finance, or tourism. For the purposes of this article, we will take Forex to refer to the process of trading.
What Happens in a Forex Market?
A foreign exchange market is simply where currencies are traded against each other. It is a very important and interesting process, and the world as we know it would come to a standstill. Why? Suppose you live in Thailand and want to buy a Japanese manga, an Indian spice, or a French wine. You need to pay for the goods in either Yen, Rupees, or Euros for any of those transactions.
If you have that particular currency, well and good. However, the chances of you having the currency you want to buy things in is very low. In this situation, you will have to exchange your currency for a foreign one. Either you will do it yourself, or the importer will have to do it for you.
Either way, every time you buy something from another country, you are taking part in a Forex trade.
The interesting thing about Forex markets is that there is no centralized place you go to for foreign exchange. Instead, most of the trades happen online through over-the-counter electronic transactions. These transactions are handled around the clock for five and a half days of the week and across several centers of financial importance, such as New York, London, Paris, Zurich, Frankfurt, Hong Kong, Singapore, Tokyo, and Sydney.
Why so many many? This is to make sure that a market is open in most time zones across the day. If you want to trade for Australian dollars or Yen, you need to trade during the hours when that center is open. Similarly, when that center closes, the American one opens up for business. You, as the trader, need to work during the hours when the traders of the currency you want are active.
Risks Related to Forex Trading
Like everything else happening on the internet and related to money, there are many risks involved with Forex trading. Because it is so decentralized, there are no standard rates. The market is very volatile, and rates can change as many as twenty times in an hour. In fact, depending on which part of the world you are trading from, you may find that the market is completely free of regulation of any kind.
There are many guides for beginners that detail the various risks involved and how to get around them, and if you are among those people who are just getting your feet wet in the field, looking up ways to protect yourself is probably the best thing you can do.
Pros and Cons of Trading Forex
Forex trading is not easy. There are many things that make it…
Go to the news source: A Quick Introduction to Forex and Forex Brokers