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What Is Forex Market? Everything You Must Know About Forex

In this article, you will be able to find the answer to the question - What is the Forex market? Also, various terminologies & components have been discussed.

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What Is Forex Market? Everything You Must Know About Forex

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  1. WHAT IS FOREX MARKET? WHAT IS FOREX MARKET & WHAT ARE ITS COMPONENTS?

  2. INTRODUCTION • The Forex market is essentially a place where the trading of global currencies happens. In this market, currencies that belong to various countries will be bought and sold on a large scale.  • The novice trader needs to know 'what is Forex' and all of its components. Traders should be well versed in the fundaments of the market before trading it. Hence, in the interest of our readers, we have presented all the basics of the Forex market in this article, which includes the size & liquidity, components, types, etc. Also, we have discussed the reasons why you should prefer trading the Forex market over other financial markets.

  3. WHAT IS FOREX MARKET’S SIZE & LIQUIDITY? • The Forex market is decentralized as it doesn’t have any central exchange or physical location. For instance, the US Stock Market has the New York Stock Exchange, which is a real place where all the deals are done. The same is the case for Tokyo and London stock exchanges. But when it comes to Forex, the entire market is run by a network of banks, electronically. The transactions occur online, and traders get to speculate on the market 24/5 as long as they have an active internet connection (except for the weekends). These are some of the reasons that contribute to the Forex market’s high liquidity. The daily trading volume of the Forex on an average is whopping ~$5.3 Trillion. 

  4. WHAT IS FOREX MARKET’S HIERARCHY? The hierarchy of the Forex market is given below based on their contribution to the Forex’s trading volume. • International Government Banks & Large Commercial Banks • Electronic Brokerage Services • Medium - Small Sized Banks • Retail ECNs • Global MNCs • Retail Traders

  5. TYPES OF FOREX MARKETS Types of Forex Markets • Spot Market • Futures Market • Options Market • Exchange-Traded Funds

  6. PROS OF TRADING THE FOREX MARKET • There are many advantages of trading the Forex market over any financial market. Relatively lower trading fee is one of the major reasons why traders prefer this market. A lot of fees that are involved in the stock market like clearing fees, brokerage fees, etc. can be eliminated while trading the Forex Market. Apart from the fee, High Liquidity, Leverage Trading, 24-Hour market, Variable Lot Sizes are some of the many pros that are involved while trading the Forex market.

  7. THANK YOU

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