Forex is otherwise also known as the foreign exchange. Forex is the HubSpot for changing currencies or exchanges. The foreign exchange represents the process of changing one currency into another.
This is carried out for various reasons, but mostly when you visit other countries for holidays.
If you want to trade within any country, you must do that in terms of their national currency. Apart from tourism, other factors include trading or commerce purposes.
What Is Forex Market
Suppose you have travelled from the US to France and you want to go out shopping, but the stores only accept Euros, what would you do?
Or an Indian based company wants to buy fabrics from European companies, but the European companies only accept euros and not rupees?
In cases like these, you are required to exchange your dollars/rupees for euros. You can do this in a forex market.
The forex market is the place where the exchange of currencies takes place. Forex market is open for 24 hours in a day and five and a half a day every week.
These markets are present from New York to Hong Kong; the time difference enables 24 hours of working.
The closing time of one market marks the opening of another one.
The working mechanism of the forex market is pretty much similar to that of a stock market; the only difference here is that currencies are being traded instead of stock.
The value of currency keeps on fluctuating every day; for example, the value of one currency can be $0.60 one day and $0.70 the other day. This might seem like a negligible difference, but it can make a huge difference when you have bulk f quantities.
How To Take Part In Forex Market?
In earlier days changing money or currencies was a tedious task. However, with the onset of the technological era, the internet has fairly made it very easy to trade/exchange in forex markets.
Forex market is a complete internet-based service, and it takes place 100% online, unlike the days when you had to wait at desks or in queues.
Forex market is fairly necessary for trades between companies to take place and for tourism and commerce of a country. Of course, it has its own set of advantages and disadvantages, but you need careful consideration before being a part of it.
