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Forex

FOREX or FX is the abbreviation of foreign exchange, the marketplace of trading currency pairs with continuous 24hr non-stop operation through weekdays. It is a decentralized market with huge trade volumes (approx. $4 trillion daily!!). Of course, these numbers seem exorbitant and multiple in relation to all other regulated markets (stock markets, commodities exchanges etc.), but that occurs largely on everyday transactions through the process of the leverage which operates as an accelerator of the capital invested and affecting both the profit when an investment yields and vice versa when we write losses.

Currency pairs price movements are formed by a lot of factors, such as state economic announcements, central banks interventions, political conditions, other breaking news and lastly by the market psychology as it is shaped by investors and traders around the globe.

Furthermore, as a part of this introductory article, we could explain Forex with an example: The most famous and tradable currency pair in the world is EURUSD, which is the price relationship between Euro & U.S. Dollar. So, if the EURUSD price is 1.0920, that means for every 1 euro that we own, we can buy 1.0920 U.S. dollars.

Finally, some more data about FX market:

Who are the Forex Participants:
1. Central Banks
2. Investment & Commercial Banks
3. Hedge Funds
4. Investment Firms
5. Import / Export Companies
6. Multinational Corporations
7. Non-Banking Money Transfer and other Currency Exchange Offices
8. Retail Traders
9. Other Speculators  

The Top 5 Traded Currencies by Value:
1. USD (USA Dollar)
2. EUR (EU - Euro)
3. GBP (Great Britain Pound)
4. JPY (Japanese Yen)
5. AUD (Australian Dollar)

A typical downtrend pattern (Instrument: EURUSD, Timeframe: 1hr, Trendline, 20-SMA, Relative Strength Index, Trading Volume Bars)