The forex market or the FX market is the central haven for all currency exchanges. If a French company wants to buy a parts from a Chinese company, they have to do it on the FX market, ya dig?
But British pension funds can also invest in Australian insurance companies too using the FX market. And you can use it too to learn trends and make some cash!
The FX market is open around the clock 6 days a week. If you hear about news or events and want to invest accordingly, you can do so pretty much at any time.
VOCAB: “Spot” refers to the price you can buy or sell currencies right now or ON THE SPOT (see what they did there?) This is to differentiate from future trading.
The guess is that 90% of trades in the FX market are made based on speculation. Which is good news for you because you’re just speculating too, ya n00bie. Take comfort in knowing nearly everyone, even the experts, are speculating when they trade on this kind of market.
VOCAB: “Major currencies”— Most trading takes place within the 5 most developed currencies in the world which are:
- The U.S. dollar (USD) um…duh!
- The Japanese yen
- Great Britain’s pound
- The Swiss franc
On top of that there are also minor pairs such as:
- The Canadian dollar
- The Australian dollar
- The New Zealand dollar
But just what should you do with these currencies or the FX market for goodness sakes? Read on to learn more…