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Free Forex Technical Analysis Training Course in Telugu Day 1 - What is Forex? Advantages, Forex Currency Pairs
Forex... is the short form of Foreign Exchange.
Whenever you want to exchange one Currency to another Currency, you involve in Forex.
Advantages of Forex:
Forex is the largest and most liquid market in the World.
No Commissions/ Low Transaction Costs: No Clearing fees, no Exchange fees, no Government fees, no Brokerage fees. Only “Bid/Ask Spread”.
No Fixed Lot size: Lot Size is very low like 0.01 and multiplies.
24 Hours Market: Opens in Monday mornings and closes at Friday nights.
No One Can Manipulate the Market: As the Forex Market is Huge; no one can control the Market.
Leverage: Brokers provide 1:50 to 1:1000 Leverage. You can trade low Capital and make good profits. But Leverage is a double edged Sword.
High Liquidity: As the market is so huge, it is also extremely liquid. You will never Stuck in any trade. Instant Buy/Sell.
Demo Accounts: Brokers allow you to Trade on Demo accounts, which is play money. You can practice your Skills before entering into the market.
Major Currencies involved in Forex:
United States of America (USA) : US Dollar (USD)
United Kingdom (UK) : Great Brittan Pound (GBP)
Australia : Australian Dollar (AUD)
Japan : Japan Yen (JPY)
New Zealand : New Zealand Dollar (NZD)
Canada : Canadian Dollar (CAD)
Switzerland : Swiss Francs (CHF)
Europe : Euro (EUR)
If you want to enter into Forex, two Currencies are required. That is called a Pair.
In EUR/USD Currency Pair;
EUR is called Base Currency and
USD is called Quote Currency.
If you buy one EUR/USD;
“You are buying one Euro and you are selling USD at the Quote Price”
If you sell one EUR/USD;
“You are selling one Euro and you are buying USD at the Quote Price”
Types of Pairs:
1. Major Pairs – Any Currency Pair contains USD is called Major Pair.
2. Minor (Cross) Currency Pairs:
3. Exotic Pairs: Less priority Pairs.USD/SGX
Exotic Pairs are made up of one Major Currency with an emerging country’s Currency, such as, Hong Kong, Singapore, South Africa, etc.,
3. USD/ZAR, etc.
With some Brokers, you can see some of those pairs. But keep in mind that they are low liquid Pairs and transaction charges are bigger.
Who Participate in Forex Trading?
1. Central Banks: To meet the internal Foreign Currency requirements of their Countries.
2. Institutional Traders: Mutual Fund Companies, Insurance Companies, Brokers, etc. participate in huge Volumes.
3. Exporter’s & Importers: To protect from Losses in future because of the Currency Rate Changes.
4. Individual Traders: Traders like You and Me.
Note: “Individual Traders are Not Market Movers... Market Followers”
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