The Forex (FX) or Foreign Exchange Market is the biggest financial market with its day trading volume of almost $ 5 Trillion.
When we compare the stock markets around the world like The NYSE (trades almost $ 22.4 billion every day), Tokyo Stock Exchange ($ 18.9 billion trade volume) and London Stock Exchange ($ 7.2 billion), the currency market is almost 200 times bigger. However, this figure $ 5 trillion covers the entire world's foreign exchange.
What is traded in Forex?
As we are not buying something physical, Forex trading could be a bit confusing. In Forex, you are actually trading money or currencies. The value of the currency reflect what the market senses about the future, and the current health of the economy of the country.
This means, the currency's exchange rate vs. other currencies reflect the country's economic conditions, when compared to the economy of other countries. The widely traded currencies in Forex include Dollars, Franc, Yen, Pound and Euro. This Forex blog post will give you some info about various types of Forex Orders.
- Entry Orders – This is used to enter the currency trade, once the currency pair reaches a preset price.
- Entry Limit Orders – This order initiates to sell an open position, when the market rises. You can also use it to buy if the market falls.
1. Buy Entry Limit – This order buys below the price of the current market
2. Sell Entry Limit – This order sells above the price of the current market level
- Entry Stop Orders – This initiates the selling of an open position, when there is fall in the market or buys, when the market rises
1. Buy Entry Stop – This order initiates a buy at a value greater than the current market level
2. Sell Entry Stop – This order sells at a value less than the current market level.
- Limit Orders – This order is associated with a particular position, which locks the gains at that position. All these limit orders are effective, until the position is cancelled or liquidated by the client.
- OCO – This is the stop-loss order. The limit order is associated with a particular position. Also, the order, 'limit' takes profit whereas the order, 'stop' prevents loss. When an order is executed, the other one is automatically cancelled.
- Market Order – This order is placed to buy or sell and it has to be filled instantly at the current currency price.
- Stop-Loss Orders – This order will be carried out, whenever the displayed value on the platform reaches the order price limit.
Different Ways to Trade
- Spot Market
- Exchange Traded Funds
There are several benefits of trading in Forex. Hence, more and more people these days are choosing this market to make money.