Forex Definition (Part II)

Forex trading is traded in currency pairs are called pairs. For example USD / JPY pair, which means the exchange rate between U.S. Dollar and Japanese Yen. Oh yeah, before authors forget, there will be some of the terms or abbreviations that we will meet in the forex world.


Among the instruments of investment on the stock exchange, forex trading is the greatest instrument his capital. Large volume of trade of about U.S. $ 2 trillion (remember, in U.S. Dollars) was approximately 46 times greater than the commodity futures exchange markets (such as rubber, coffee, gold, etc.) others. Or thousands of times greater than the total transactions on the Jakarta Stock! With a capitalization of that, then known as the forex trading the most liquid and largest market in the world.


Only 5% of funds above that is the routine nature of government funds. The other 95% belongs to the investors free of many of the world. Truly the largest and most diverse market. Another plus is an investment instrument that is active 24 hours a day, 5 days a week. Starting from the markets of Europe, America, Asia and Australia. So unlike the Jakarta Stock Exchange which can only transact in the day, the forex trading (especially in online forex trading) we can trade anytime and anywhere.


Not all currencies can be traded here. Only a few developed countries currency which is used is USD (U.S. Dollar), JPY (Japanese Yen), GBP (British Pound) EUR (Euro) CHF (Swiss Franc), and AUD (Australian Dollar). So if we invest in the forex trading market, then we will not find pairs of IDR (Indonesian Rupiah) with CAD. That there are currency pairs that author mentioned before EUR / USD, USD / JPY, CHF / USD and so on. Remember our earlier definition, forex trading is the trading of foreign currency with other currencies.


This is one difference with the money changer in general. If you go to money changers and exchange your dollar amount, then that means you do a transaction with a pair GBP / USD alias Indonesian Rupiah to U.S. Dollar. This never happens in forex trading. Traditionally, currency trading currency of the country which is just fundamentally had advanced with a large volume of exports and stable imports.


The next feature of the forex trading is that he never physically traded. Yup, never. In contrast, if you have to go to money changers and exchange your dollars, then you are required to carry in your pocket physically. For forex, trading is not done physically.Recorded only evidence of any transaction and when you do a transaction. At the inception of all forex transactions are written in the form of a letter beharga. Then after the phone use is widespread, evidence of reduced transaction only be a short writing course which is called quotes. From this was born the term Dealing Quotes (DQ).


Today, forex trading is no longer done by telephone. It's getting outdated. Now its time online. Then all manner of transactions and evidence of any transaction done online.You simply fill in your user id and password provided by the platform provider (in this case called a broker or broker) and then, click ... and emerged all the details of your transaction. It is easier for everyone in forex trading because then anyone can do the transaction and more so, the transaction is no longer limited by place and time. Due to be handled by the system and no longer on the phone that in fact must be held by a man (the dealer) then the investor can invest forex whenever he wants as long as 24 hours a day with ease. The author even know a few housewives who play forex trading through his house. Capitalize internet on their home computer or laptop, then began the action they analyze the movement of nutrients.