What is Forex?

Forex is the short term of Foreign Exchange, Forex(FX) or currency trading is  basically a redistributed into global market where all the currencies trade investing in the world. Forex Market is the largest most Liquid Market in the globe with an average and trading volume say $5 trillion or more daily basis. When you go abroad on a trip and convert your currency like U.S. dollars for Euros, means you are participating in the global foreign exchange market that time.

Ensure that at any time, the demand for a certain currency will either push it up or down in value related to other currencies. AVFX Capital is one of the best Forex Brokers in the world.

When can you trade forex?

Usually, Forex market operates 24 hours in a day and it is commonly separated into four sessions:

  • Sydney session,
  • Tokyo session,
  • London session, and
  • New York session.

What is Forex Market?

Where currencies are traded is called Foreign Exchange Market or forex market. Currencies are needs to be exchanged in order to conduct foreign trade and business. If you are living in the U.S. and going for a vacation in France so definitely you need to exchange your USD into EURO because USD is not accepted locally. This means that the U.S. importer would have to exchange the equivalent value of U.S. dollars (USD) into euros. The tourist has to exchange the local currency at the current exchange rate.

Types of Forex markets

There are three different types of forex market available;

Spot forex market

means it is the physical exchange of a currency pair that takes place at the exact point the trade is settled on the spot within a short period of time.

Forward forex market

In this market, a contract is agreed to buy or sell particular amount of a currency at a specified price, simply means that is settled at a set date in the future or within a range of future dates.

Future forex market

In this market, a contract is agreed to buy or sell and a set amount of a given currency at a set or decided price and might in that date in the future. However, a futures contract is legally binding in the forex market.

Most traders speculating on forex

Speculating means price could be increased or decreased. In this market prices will not plan to take delivery of the currency itself. Traders do they make exchange rate predictions as per current market price and take advantage of price movements in the market.

What is a lot in forex?

Lot means a batch; currencies are traded in lots and batches of currency used to standardize forex trades. Forex always tends to move in small amounts then lots tend to be very large. So a standard lot is minimum of 100,000 units of the base currency. Because this is very common individual traders won’t necessarily have 100,000 pounds or dollars to place on every trade. So there is almost all forex trading is going on leveraged.

What is leverage in forex?

The term “leverage” means of gaining disclosure to large amounts of currency without having to pay the full value of your trade in front while you put down a small deposit it is known as margin. Similarly, when you close a leveraged position your profit or loss is based on the full size of the trade as well.

What is margin in forex?

“Margin” means your profit, what you give and what you take, right?  Here it is in forex market, margin means expressing a percentage of the full position and it is a key part of leveraged trading.  When you are trading forex with margin, your margin requirement may be changed by depending on your broker as well as how large is your trade size.

Suppose take an example, there is a trade on EUR or GBP, and that might only require 1% of the total value of the position to be paid in order for it to be opened. Here instead of depositing AUD$ 500,000, you have only to deposit AUD$ 5000.

What is a pip in forex?

A forex pip is generally equivalent to a one digit movement in the fourth decimal place of a currency pair. Pips are basically the units that is used to measure movement in a forex pairing.

Suppose, take an example if GBP or USD moves from $1.45462 to $1.45424, then it has moved a single pip. Why? Because the decimal values shown after the pip are called fractional pips or can be called pipettes.

Why Trade with AVFX

AVFX Capital a leading forex provider, when you trade with AVFX, you are open to access all the benefits which is only a top broker can be provided.

  • Free access to useful education resources on Forex and Trading
  • Get 24x5 service support when you need it, no matter wherever you are
  • Free online education, on-demand lessons, and highly experienced training support
  • Multiple account types including MT4, MT5 and Commission
  • Invest with a wide variety of currency pairs
  • Trade by your free time with mobile or PC.

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