Forex Market Success: What Currencies Are Traded the Most?

ByJeanette J. Sellers

The value of Currency plays a vital role in this advanced era and can bring a huge profit or loss for you. The Forex Trading is a global business of currencies that is dealt on an international level. Financial platforms act as a trading center between the marketers including the main banks, i.e. EBS and Reuter's dealing 3000. The origin of modern Forex can be said in 1970s.

Forex trading is different from other markets on the following basis:

It is the largest market and conducted worldwide.

It is active 24 hours a day excluding weekends.

The major factor, it depends upon is the fluctuation of currencies that are in exchange.

The marginal rate is lower as compared to the other financial markets and Leverage is used to increase or decrease the margin rate.

Unlike Stock Exchange Market, here in Forex, the trader can directly deal with the broker individually.

The participants involved in this business are categorized into various classes, i.e. Interbank (the largest financial institution around the world), Spreads (Those who play with the bid price and the ask price), commercial banks, corporations and retail marketers, speculators, etc.

The investor has to analyze deeply the value of which currency will rise and which will fall in the future. However, these days, the tricks of Forex trade are also commonly being used, e.g. The Method of Lagging Indicator that predicts the fluctuating rates of paired currencies. Another famous tool is a Robot Trading System that is software directing you when to start and when to stop trading according to the market conditions. Scalping is also a strategy being used by the Forex traders for a short time and they enter and exit the Forex world accordingly. Price Action is a very useful method that estimates the price without any indicator. It makes you satisfied and confusion-free.

Here is an important point to be noted that you should be careful regarding the Forex trading scams. There is no way to be rich within nights. It is, no doubt, fruitful and interesting business, but be careful of the Automated Robots that are common in the Forex trading concerns. They are the useful invention of this modern time, but it is not necessary that they will always work. Most of the time, they stop working and you may lose your money. Besides, there are many brokers and signal service providers who are scammers. So you have to explore every avenue before you set foot in the Forex world.

Let us come to the point of how Forex work? Just suppose, you belong to Britain and want to buy sugar from Japan, you cannot trade in your own currency rather you will have to exchange your currency with the Japanese currency that is Yen. If you travel to U.S, you will make the payment in USD because it is their local currency accepted by them, not in British Pounds. So the need to exchange currencies arises and hence, this is all about the Forex.

All the transactions are held online Over-The-Counter (OTC) through the internet and not for a single hour, the market is closed round the whole day. Its business hours are not restricted, but open 24 hours. There is no physical purchase and sale instead you make an agreement with the other party to exchange the currency in the future and this is the thing that provides you benefit if you have expected rightly about the value of currency you are dealing in. Generally the commission of brokers is not so high. This is just a deposit as a security in case of loss.

As per estimate made by the Bank for International Settlements, the daily volume of Forex in 2010 was $3.98 trillion on average including spot market deals, forward contracts, Forex swaps, currency swaps, etc.

Scalping is also a strategy being used by the Forex traders for a short time and they enter and exit the Forex world accordingly. Price Action is a very useful method that estimates the price without any indicator. It makes you satisfied and confusion-free.