What happens in Forex
- Buying & selling of currencies or exchange of CCY
- Buy Low & Sell High
Key Features of Forex Market
- Open 24*7 5 days a week
- One can start trading with a micro lot size
- Leverage
- Largest asset class in the world due to its huge trading volume
- The main currency trading centers are London & New York City, though Tokyo, Hong Kong, and Singapore are all important centers as well.
- Regulated by different bodies like the Financial Conduct Authority (FCA)
- Manage risk by setting SL and TP
Three major Forex trading sessions
Historically, the forex market had three peak trading sessions, commonly known as the “forex 3-session system“
- ASIAN SESSION = TOKYO SESSION
- EUROPEAN SESSION = LONDON SESSION
- N AMERICAN SESSION = NEW YORK SESSION
Some traders prefer to differentiate sessions by names of
the continents; other traders prefer to use the names of the cities. (Sydney,
Tokyo, London, and New York)
Daily turnover
According to Bank for International Settlements, the
average daily turnover in the global foreign exchange market was $6.6
trillion in April 2019
Top 10 Currency traders (% of overall volume, June 2019)
Most traded Currencies by Value
How currencies are traded
Currencies are traded against one another in pairs.
EUR / USD GBP
/USD
First CCY is the Base currency
Second CCY is Quote currency or Counter Currency
Different types of Currency Pairs
- MAJORS (Most Traded CCY pairs in the world)
EUR/USD USD/JPY
GBP/USD AUD/USD
USD/CHF NZD/USD
& USD/CAD
- CROSS PAIRS (CCY pairs without USD)
GBP/JPY (GBP CROSSES)
EUR/GBP (EUR CROSSES)
- MINOR OR EXOTIC PAIRS(lesser-traded pairs)
USD/SEK
USD/THB USD/MXN etc
Market Participants in the Forex Market
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