You want to know the nature of what is Forex Exchange Trading and why are there so many people participating. Are you looking for ways to succeed with forex trading? Are you brand new to the market and want to understand the forex market in the most accurate way? The article, Learn Forex Trading will summarize the most important knowledge about forex for readers.
What is Forex Exchange Trading that is “sought after” by the financial community?
Forex is short for Foreign Exchange, symbol FX. Translated, it means global foreign exchange. This is a form of buying and selling foreign currencies around the world, according to exchange rates through credit and banks.
The operating principle that Forex applies is to buy and sell currencies against other currencies. Along with that, transactions will apply some additional international and local rules. The forex market is complex and difficult to control, all rules are just temporary agreements between buyers and sellers.
Learn the concept of Forex trading
Besides what is Forex exchange Trading, many people will ask the next question: what is Forex exchange Trading? Simply put, this is the activity of exchanging foreign currency/papers that have the same price as foreign currency in the international market.
Forex trading is an active trading market in the world. Directly involves conversion from one national currency to another. Specifically, current transactions, capital transactions, and use/provision of foreign exchange services. This activity will have an extremely large volume, averaging approximately $5 trillion/day.
Forex transactions are not performed on a centralized exchange but on a global network. So the currency will be converted through banks, brokers, or exchange agents.
See more: Forex is a great way to financial “billionaire”
What is the difference between the Crypto market and the what is Forex Exchange Trading market?
| Comparative characteristics | Crypto Market | Forex market |
| Participants | Starting with small traders, and then moving to large corporations. | What is Forex Exchange Trading? Starting with big banks, big corporations,… then small traders. |
| Trading pairs | These are cryptocurrency pairs. The essence is to use intermediary coins (BTC, ETH, USDT), to buy the coin you want. | These are currency pairs. The essence is to exchange one thing for another. |
| Ability to earn profit | The possibility of higher profits than forex due to lower leverage, and large price fluctuations. | On average each quarter, 25-35% of traders generate $1 in their accounts, the rest have no profit. Easy to lose due to high leverage. |
| Credential | Lower than the forex market. The average trading volume is only 100 to 200 billion USD/day. | Higher than Crypto due to smaller price fluctuations. The average trading volume is 6.6 trillion USD/day. |
| Price fluctuations | Bigger than forex => Higher profits but easily disappears when coins lose value. | Lower than crypto. Therefore, the leverage of forex is higher than Crypto. |
| Operating time | 24/7 | 24/5 |
Should I choose to trade Crypto or Forex?
Forex is considered a long-standing, more stable market thanks to less volatile prices than the Crypto market. At the same time, forex profits will not be as large as crypto. Therefore, if you are someone who does not want to take too much risk and is not too greedy for big profits, then forex is a good choice for you.
On the contrary, the Crypto market was born later and is a new, fertile land for investors. Of course, there are many risks involved. If you want to experience and get rich quickly, you can make huge profits with Crypto.
No matter which market you choose, trading knowledge is still the most important and decisive for success. Seriously research, gain experience, and practice calmness in the face of unexpected market fluctuations.
What is the advantage of what is Forex Exchange Trading to make many people participate?
To know whether you should invest in the foreign exchange market or not, consider the following great advantages that forex brings you.
Forex trading brings huge income in a short time
Compared to other financial markets, price fluctuations on forex are relatively large. This is an opportunity to bring big profits to traders. At the same time, there are many potential risks that you need to learn about and manage well. Therefore, if you want to make money, forex is still a fertile market for you.
Forex market liquidity value is high
The forex market is highly liquid and extremely vibrant with the largest number of buyers and sellers in the world. Besides individuals, organizations and banks participate.
Does not require investors to have a lot of capital when participating in Forex
If you only have a small amount of capital, you can still participate in the forex market. If you want big profits, the forex market offers high leverage ratios for you to choose from. However, you need to have good control over your trades and strategies. Because the higher the leverage, the greater the risk and opportunity.
Forex trading does not necessarily require an intermediary
When participating in the forex market, buyers and sellers can exchange currency pairs directly with the broker without having to pay anyone. Just place an order with the exchange.
Risks when participating in what is Forex exchange Trading? How to limit foreign exchange risks?
Similar to other financial investment fields, the forex market has many potential risks. So specifically, what are the risks of what is Forex Exchange Trading, and how to minimize them?
Risks from leverage and Forex financial management
Leverage helps you increase profitability but the risk of losing capital is also high. Therefore, to minimize risks, you need to manage your finances and capital effectively. You should determine the level of risk you can accept. At the same time, set a stop loss to keep the loss from exceeding that limit.
Forex traders in UK do not have many protective laws
Up to now, still has no laws that specifically regulate or protect forex traders. This makes many people still cautious when entering the market. Potential risk when disputes arise.
UK’s regulations with what is Forex exchange Trading?
In UK, the State Bank affirmed that it has never issued any licenses to organizations or individuals doing business in the form of forex trading exchanges.
However, the 2005 Foreign Exchange Ordinance also states the principles of business and provision of foreign exchange services in Article 36. Accordingly, if a bank branch/credit institution or other organization provides/businesses services If a forex transaction is approved in writing by the State Bank, that organization is allowed to operate. Thus, traders participating in transactions at those organizations do not violate the law.
Famous international forex trading exchanges are managed and supervised by leading reputable organizations in the world. UK traders can completely participate in trading at these exchanges without being prohibited or fined by UK law.
Risk of falling into fraudulent “traps” on Forex exchanges
Fraudulent tricks on forex exchanges are not new, mainly targeting greed. Especially since the epidemic, other investment channels have not been profitable. Therefore, many people look for better profitable investment channels.
Taking advantage of this, many people have used interest rates of hundreds or thousands of percent as bait. Just sit idle, money will still come into your account regularly. They organize seminars, consultations, parties, and honors, and show off their luxurious lives. From there, make others believe that following them will make money.
“Unmask” sophisticated scams in the Forex market
The most common scam in what is Forex Exchange Trading? Inviting and attracting players via telephone (telesales). Or via social networks Facebook, Zalo, consulting groups, etc. Initially, they will often help investors win money, stimulating them to pay more money to get more profits. Then, they placed a large order and lost all their money.
Next, the subjects will be introduced to another forex exchange to remove the problem. With a commitment to get back all lost money. This scam forex broker has installed a function to interfere with customer accounts. If the investor wins, they will use tricks to place false orders and block access to the account.
The best way to avoid being scammed on what is Forex exchange Trading?
To avoid being scammed, what is the best way to avoid what is a trader? Investors must carefully research information about the forex exchange they want to participate in. In particular, a reputable forex exchange needs to have operating licenses, and be managed and supervised by large financial organizations such as CySEC, ASIC, FCA,… Besides, it is necessary to collect more reviews from the experts. Experts and forex market review forums.
Summary of “all” Forex-related terms you need to know
To be successful in the forex market, you need to learn solid foundational knowledge. In particular, understanding the terms what is Forex exchange Trading is extremely important. If you are new to the forex market, you will be surprised by the mysterious terminology system.
What is Forex Exchange Trading? What are the factors involved in trading?
| Terms | Explain the meaning |
| Lot | The number of standard units of an asset being traded |
| Bid | Bid price what is Forex exchange Trading? The exchange’s bid price. That means the trader will buy the forex pair at this price. |
| Ask | The asking price is offered by the exchange. That means the trader will sell the forex pair at this price. |
| Pips | Pip is the smallest unit, measuring the price difference of a currency pair. |
| Lever | This is a feature that the forex exchange provides to traders, helping to open a position larger than the actual capital. |
| Spread | Is the difference between the buying price and the selling price of a currency pair. |
| Margin | Margin what is Forex exchange Trading? – Is the amount of money that traders deposit at the stock exchange to help maintain their trading positions. |
| Margin Call | A margin call occurs when the margin has dropped below the minimum level. Positions are losing big, warning traders to pay more margin to protect assets and positions. |
| Liquidity | Is the ability for a currency pair to be traded/traded according to high or low demand. |
| Popular asset symbols | XAUUSD: GoldUSOIL: Oil |
Common orders and charts in what is Forex exchange Trading?
| Terms | Explain the meaning |
| Buy/Sell | Buy/Sell order at market price |
| Buy Limit | It is a pending buy order, helping traders buy at a price lower than the current level. |
| Sell Limit | A pending sell order helps traders sell at a higher price than the current level. |
| Buy Stop | Pending orders help traders buy at prices lower/higher than the current price. |
| Sell Stop | A pending order helps traders place sell orders at a price lower than the current price. |
| Line graph | A chart created by connecting the closing price points of all trading sessions. |
| Bar chart | A type of chart that uses vertical bars to show different prices within the same trading session. |
| Japanese candlestick chart | It is a chart in which each candle represents a transaction, including 4 prices: opening, closing, high, and low. |
The fastest way to read and effectively use technical indicators What is Forex Exchange Trading?
The forex market moves in a specific direction under certain conditions. Trends often repeat, creating price patterns. Therefore, reading, understanding, and using forex technical indicators effectively will help traders increase their advantages and optimize their trading strategies.
The most popular indicators in Forex trading today
Forex trading platforms provide extremely diverse indicator systems, typically MT4 with 30 types of indicators. Among them, the most popular indicators are:
1- MA indicator: MA in what is Forex exchange Trading? It stands for Moving Average, which represents an upward, downward, or sideways movement. At the same time, let traders know the resistance and support zones.
2 – ADX indicator: shows the strength/weakness of an up/down trend. This indicator is calculated according to the average price fluctuation over a certain period of time.
3 – Parabolic SAR indicator: has a parabolic form that helps traders identify reversal points and establish new trends.
4 – Ichimoku indicator: helps determine market trends, support, resistance, momentum, and entry/exit signals.
5 – MACD indicator: MACD in what is Forex exchange Trading? It is an indicator that helps determine convergence/divergence points, price momentum, and price trends.
6 – RSI indicator: shows price changes, fluctuating from 0 – 100. An indicator below 30 represents the oversold period; Below 50 shows a strong decline; greater than 50 represents an increasing trend; greater than 70 is the overbought period.
7 – Momentum indicator: shows the strength of a trend, helping traders determine whether the trend will hold or reverse.
8 – Bollinger Bands indicator: includes 3 bands, expanding when the market fluctuates strongly, narrowing when the market goes sideways.
9 – ATR indicator: helps traders find overbought/oversold points.
Analytical schools are widely used in Forex trading
For new investors, analysis is a quite complex and advanced concept. So what are the most used analytical methods in forex? What is trade Forex?
Technical analysis
This is a school of analysis of the forex market based on historical quotes. Helps traders know specific price trends in the future. Traders will use a technical indicator system, combined with charts on trading platforms.
The most popular method is still candlestick pattern analysis. Allows traders to look for candlestick reversal patterns or trend continuations. From there, determine the future price direction or the time of reversal/break trend.
Analysts can do this manually or through an automated system. The main trick is to use technical indicators for analysis yourself. Automatic means using EA software, automatically analyzing and sending signals to traders.
Fundamental analysis
Basic analysis of what is Forex Exchange Trading? This school helps analyze changes in the forex market by monitoring/assessing whether the data is complete and reasonable. Typically interest rates, GDP, unemployment rate, etc. Analysts will filter important data, which has a direct impact on making trading strategies.
With that, they can fit the information into a number of charts/trends/models to create a complete plan.
Analyze market sentiment
This school is less used than the two technical and basic schools. The basis of the analysis is that traders’ assessments of the market will have certain differences. Each person has their own analysis and explanation of the fluctuations. All opinions are expressed through trading orders.
The forex market brings together all different opinions, views, and ideas. So psychological analysis in what is Forex exchange Trading? It is about focusing on the overall emotional/psychological state of all traders. Some will follow the crowd or oppose it according to the often wrong theory of the crowd.
You can combine this school of analysis with fundamental/technical analysis to increase the effectiveness of the analysis.
Where can I follow Forex news and charts?
The economic calendar is a tool that helps you track forex news effectively. So what is the economic calendar source for What is Forex Exchange Trading? Those are reputable websites such as Investing.com, Fxstreet.com, Forexfactory.com,… They also provide online charts.
One of the most famous websites for forex charts is Tradingview.com. Tradingview provides a charting platform and is also a social network that gathers more than 50 million investors/traders worldwide.
See more: Instructions for registering an Exness account
How to find a reputable Forex broker so you don’t lose money?
Currently, there are countless forex brokers operating on the market. So how to choose a reputable forex broker with reasonable transaction fees?
Criteria for evaluating the reputation of a exchange: What is Forex Exchange Trading?
- Legal standards: A reputable forex exchange ensures legal and transparent operations if supervised and managed by leading organizations such as FCA, ASIC, NFA, and CySEC.
- Operating time over 10 years: The longer the exchange has been operating, the more prestigious it is. Long time also shows the development in scale and services.
- Professional website: A broker has a website with a beautiful, professional interface that shows that they invest and respect their customers.
- Reasonable Spread Fee: Reasonable Spread Fee of what is Forex exchange Trading? Emphasis is reasonable, not low. Reasonable compared to the general market, if it is too low, it could be a trick of a scammer.
- Customer service: Get support and answer questions quickly.
- Diverse deposit and withdrawal ports: This creates favorable conditions for customers.
- Trading platform: suitable for trading goals/style.
Forex exchanges have been highly appreciated recently
| STT | Forex exchange | Salient features |
| 1 | Exness | Extremely low minimum deposit, only 1$. Regulated by: FSA, FCA, CySEC, FSCA. High leverage up to 1:2000. Fast withdrawals. Free Swap with gold and cryptocurrency. Consulting 24 /24.Fast and simple registration.Platforms: MT4, MT5 |
| 2 | XM | The minimum deposit is only $5. Managed by: CySEC, IFSC, ASIC, and DFSA. Diverse promotions. No commission fees Diverse accounts with many levels of Cashback when depositing and withdrawing money by Master Card, or Visa. |
| 3 | ICMarkets | Operating time: 17 years. The minimum deposit is only $200. Managed by: FSA, ASIC. Transaction costs: 0. Diverse deposit and withdrawal methods. Platforms: MT4, MT5, cTrader. |
| 4 | Liteforex | Minimum deposit: 50$ Managed by: CySEC. Representative office. Low commission fees. Large Copy Trade platform. |
| 5 | Forex4U | The minimum deposit from only $0. Managed by FSC. High leverage up to 1:2000. Low spread. Representative office |
Epilogue
Above, Learn Forex Trading has gathered all the knowledge to help you clearly understand what is Forex Exchange Trading and the most important related concepts and terms. At the same time, know the most popular types of indicators, charts, and analysis methods. Hopefully, all will help you succeed in forex trading.
FAQ
what is Forex exchange Trading?
Forex (Foreign Exchange) is a foreign exchange market where world currencies are bought and sold. This is the leading and most popular large-scale market globally.
How to participate in the forex market?
To participate in forex, you need to open a trading account with a reputable exchange. Then use the trading platform to log into that account and place a buy or sell order.
How to choose a reliable forex trading platform?
Read exchangeing reviews on websites. Along with that are genuine reviews from users in forex forums.
