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What Is FOREX Trading Platform And How Does It Work?
By: John Eather

Published: November 1, 2009
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What is the Foreign Exchange Market? FOREX trading platform allows traders to buy and sell currencies at the same time. Currencies must be traded in pairs (e. G. US Dollar / Euro). In other words, FOREX is the market addressed to those who want to perform conversion exchange operations according to an agreed rate for a given date.

There are two reasons to buy and sell currencies. About 5% of the daily turnover is generated by companies and governments that buy or sell products and services in a foreign country, or have to convert profits from foreign sales into domestic currency. The remaining 95% is represented by profit or speculative transactions.

What are the concepts that make FOREX work? First of all, you must know that 85% of daily FOREX trading uses major currencies like British Pound, US Dollar, Australian Dollar, Canadian Dollar, Euro and Japanese Yen. FOREX trading platform is open 24 hours a day; because of this great feature, traders can respond anytime to currency fluctuations.

FOREX is different from any other financial market because it has no central trading location. In general, transactions are conducted through electronic trading networks or by phone.

It's not difficult to read a foreign exchange quote if you keep in mind two things: the first currency listed is the base currency and the value of the base currency is always 1. U. S. Dollar (USD) is normally the essence of the FOREX market and currently it represents the base currency for quotes. For example, a quote of USD / JPY 120. 01 means that 1USD = 120. 01 JPY.

FOREX trading platform uses a quote of 2 sides- the BID and the ASK. The BID represents the price at which traders can sell base currency, while the ASK refers to the price of buying base currency.

What matters the most is to be aware that every investment is risky. You can never be 100% sure about how exchange rates will move. Therefore, it's recommended to use stop-loss orders, which are specific instructions on how to exit your position if the price reaches a certain point.

More Information:

Learn more about Forex trading platform. Stop by John Eather's site where you can find out all about Forex trading systems and what it can do for you.

Source: PopularArticles.comTM / Finance / Currency Trading / http://www.PopularArticles.com/article188184.html

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Article: What Is FOREX Trading Platform And How Does It Work?
Author: John Eather
Publication Date: 2009-11-01
Total Views: 241
Word Count: 377
Category: Home / Finance / Currency Trading
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