What is Forex?
Forex, or foreign exchange as it is otherwise known as, is a world-wide market for the
world’s currencies in which they are traded on a daily basis. Over $5 trillion dollars are
traded on the forex market every single day! Making it the world’s largest and most
liquid market which attracts millions of people everyday who trade to profit from the
up and down movements.
The sheer size of the Forex market is what makes it attainable to create a full-time
income for almost any individual, with little to no upfront capital needed. To show the
enormity of the Forex market, if you were to combine the world’s stock markets,
it wouldn’t come close to the size of the Forex market, and that is saying something.
The stock markets max out at 20 billion dollars per day which is 250 times smaller
than the Forex market, which caps out at around 5 trillion dollars per day.
However, learning Forex trading is a skill nonetheless, and must be taken seriously to
achieve financial freedom with this skill.
In order to paint a clear picture of what Forex is, think of it as an exchange of one
currency to another. For example, when you are going on vacation overseas, you need
the local currency so you can spend money. So you make a trip to the bureau de
change and exchange your United States Dollars, for British Pounds, and in doing this,
you have completed a foreign exchange. Obviously you’re not going to get the same
amount of British Pounds when exchanging United States Dollars, due to the exchange
rate. So, if you wanted to exchange $100 for British Pounds you would get a certain
amount of pounds based on the current exchange rate. However, the amount of
pounds you get one day may not be the same the next day because the world’s
exchange rates are constantly changing because a plethora of fundamental aspects,
such as inflation reports, labour statistics and interest rates, all which have some sort
of impact on a country’s currency.