What is Forex?

What is Forex?
Forex is a market that allows trading of many different currencies, which is extremely "hot" in recent years.

What is Forex?

Forex (FX), also known through the name “foreign exchange”, is a term describing a type of financial trading market, on which there're many different currencies.

Here, through the banking system - credit institutions, users from all countries can make exchanges between many currencies at a certain agreed-upon exchange rate that is quoted and fluctuates on a daily basis.

Exchange of currencies on Forex market is considered by experts to have a significant impact on the business, as well as the long-term operation of all enterprises around the globe.

Besides, the constant price fluctuations of currency pairs in this market also create an extremely attractive profitable opportunity for the participants.

In the past few years, Forex has become more & more widely known and attracted participation from many investors in an extremely strong way.

It can be commented that this type of market is an appropriate choice for those who are passionate about investing in stocks or coins/cryptocurrencies.

Forex là gì?

About Forex trading

Forex trading can be understood as the act of buying and selling currency pairs, with the aim of making a profit from the price difference.

Currently, there're 02 types of Forex trading as follows:

With centralized market

Forex trading on the centralized market is the process of exchanging as well as buying and selling currencies between countries around the world.

In this case, investors will make the transaction through a certain bank or credit institution…

Forex là gì?

With decentralized market

Forex trading on the decentralized market is the act of buying and selling listed currency pairs.

At this point, traders predict that the rate will increase or decrease at a certain time in the future and proceed to buy/sell orders.

With this market, traders can make profits even when the price drops if they predict and place orders correctly.

Every transaction on the decentralized market is done extremely fast, cost-effective and completely without supervision from any third parties.

Forex là gì?

Why Forex attracts many investors?

Forex is considered one of the extremely "hot" and potential financial investment channels in the past few years.

Increasingly strong development of this market has attracted many investors from all over the world to participate.

So why is Forex market so attractive?

It's a highly liquid market

Forex is the most liquid market today, when its trading volume is up to 6 trillion USD per day.

Unlimited trading time and location

In Forex market, investors can make trades 24/5, from 4:00 AM on Monday to 4:00 AM on Saturday every week, from anywhere in the world.

Buy and sell two-way

Investors are allowed to open buy or sell orders in any situation.

Besides, they also completely have the opportunity to make a profit even when the market is up or down.

Leverage is allowed

Forex allows extremely high leverage, up to 1:2000.

This helps investors reduce initial capital and can increase profits significantly.

On the downside, the use of leverage also has many potentials and high risks, so investors should pay close attention.

Very transparent

Forex is a financial market with the participation of countless large institutions and investors around the global.

So, no one can manipulate, not even the central banks.

No capital barriers

Currently, Forex exchanges on the market almost all allow traders to open accounts with a very small minimum deposit.

No commission fee

To attract investors, many Forex exchanges charge almost no commission.

Low spread fee

The spread (bid/ask difference) on Forex is considered to be relatively low, < 0.1 under normal market conditions.

Or even, this fee sometimes drops to just 0.

Forex là gì?