Forex or forex trading has become a very alluring and hugely
profitable market for currency and financial traders and investors all over the
world. the latest figure from a credible financial source has shown that this
market of forex trading has a daily worth 4 trillions US dollar. Forex in terms
of language is the complex of two words of foreign and exchange. In terms of
essence, forex can be simply understood as a platform or venue for
international currency trading and exchanges. Forex can be seen similar to
stock markets where shares and stocks are traded and exchanged while in the
forex shares and stocks are international currencies. On forex trading markets,
some strong and popular international currencies like US dollar, Euro or UK
Sterling will be seen as the standard currencies that are used as benchmark to
rate other minor national currencies. If you want
to find out more about this issue, please visit this link of free online trading.
The next question I want to raise is why money can be
traded. Indeed, money can be seen as a special goods that actually it is can be
traded like many other commodities. However the trading and exchanges of
currencies and money on forex is very different from the ways gold, oil, metals
or many kinds of commodities being traded on the world today. This is because
of what I have said earlier that the value of a currency on forex is rated by
the standard currencies. Indeed, the significances of standard currencies like
US dollar are huge on international trading activities. For example, if you are
a Turkish of course you use Lira - your national currency, then you have a
holiday and take a trip to Thailand
or China,
you visit a restaurant for dinner and pay for your dinner in Lira. I am sure
that there will be no any Thai or Chinese restaurant owners will accept that
payment in Lira if you and they do not have any special deal. Meanwhile, the
story will be very different if you are Turkish or bear any other nationalities
and you bring US dollars or other popular standard currencies, your payments in
those currencies are widely accepted in most parts of the world.
Evidently, US dollar and many other kinds of standard
currencies that I have mentioned above are not only widely accepted for
traveling but in daily international financial, commercial and economic
activities as well. These currencies are used in international contracts,
deals, imports and exports. As a result, forex trading markets were born to
help people, traders and investors to exchange and trade their money.