About forex day trading

Forex Tutorial: What is Forex Trading? The foreign exchange market is the “place” where currencies are traded. Currencies are important to most people around about forex day trading world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business.

If you are living in the U. The need to exchange currencies is the primary reason why the forex market is the largest, most liquid financial market in the world. It dwarfs other markets in size, even the stock market, with an average traded value of around U. One unique aspect of this international market is that there is no central marketplace for foreign exchange. There are actually three ways that institutions, corporations and individuals trade forex: the spot market, the forwards market and the futures market.

The forex trading in the spot market always has been the largest market because it is the “underlying” real asset that the forwards and futures markets are based on. In the past, the futures market was the most popular venue for traders because it was available to individual investors for a longer period of time. More specifically, the spot market is where currencies are bought and sold according to the current price. When a deal is finalized, this is known as a “spot deal”. What are the forwards and futures markets? Unlike the spot market, the forwards and futures markets do not trade actual currencies.