Forex Market – An In-depth Understanding
Forex or foreign exchange is nothing but the exchange of currencies. This is the definition of Forex. To explain this...
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This new feature of lots into different categories has made this market even more viable since it has opened its doors to all people.
Forex or foreign exchange is nothing but the exchange of currencies. This is the definition of Forex. To explain this term in simple words, it is nothing but the exchange of different currencies between different countries for conducting regular trade and business. For example, if a person wants to travel to a different country, he will not be able to use his country`s currency in the other country. So it becomes important for him to go for an exchange. To make it simpler, if you want to buy butter, you or the store you are buying from should have done this Forex to make the product available in that particular country. So this way, we get to understand that almost 70% of the products that we use in our daily living are all made available to us through this very effective Foreign exchange.
Foreign Exchange Market
Foreign exchange market is the spot where these different types of currencies are traded. This is a highly liquid and the biggest and largest market; it is so very big and voluminous that even the stock markets look and functions smaller than this. One feature that makes it stand unique from the others is that there is no center spot for this and everything happens online via networks. So unlike the other markets wherein there is the main point for transactions, here all the exchanges happen everywhere equally and electronically over –the-counter. This market is everywhere around the world making Forex possible around the globe. This is open 24 hours for five and a half days a week and hence is one of the most active markets. The changes in the currency values get updated automatically and hence trades happen at the aptest values every time. The important thing in this international market is the basic understanding of the market and the various jargons used here.
Forex market functions based on lots. There are many brokers in this market who offer to help the traders with different types of lots and also extend their assistance in the trading procedures and process. There are basically three types of lots in this market that are offered by these brokers.
Now before getting in deep to understand these different types, let`s first understand the basics. Initially, this market did not have different segments and it was all about just a standard lot size which equaled 100000 units. But with the development of technology, it became necessary to break this huge unit into small ones for easy and flexible trading and that is how we have the different types and lot sizes here.
These are the different types of lots available in the Forex market. This categorization has made this market more flexible and accessible to all types and classes of people.
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