What is currency trading?

Forex Trading:

Currency Trading or Foreign Exchange is known as Forex, a decentralized global market where currencies are traded and exchanged worldwide in exchange rates. The Forex market is one of the largest and most liquid markets with a daily exchange rate of over $ 5 trillion , Which is a very large rate. All the global equities combined do not approach this volume. The Forex market makes it easier to buy and sell currencies around the world. It is worth mentioning that it crowned (D) a high degree of risk arising from swap transactions that may result in significant losses to currency traders;

The currency is of great importance to the lives of individuals around the world. The individual needs to exchange and convert from one currency to another for the conduct of various businesses. For example, if a French tourist wants to buy a commodity from Egypt or pay for seeing the pyramids in Egypt , It will not accept the French currency there. It must convert the Euro into the Egyptian pound, which is the accepted currency in Egypt. Main in the universe of labor exchange market T of the largest financial markets and most liquid in the world, people's need to currency exchange is what makes it as important.

The main thing that distinguishes currency exchange is that there is no central market for the exchange of cash; where currencies are traded electronically over the Internet, the various transactions between currency traders around the world using computer networks, and the market is open all day or 24 hours, The exchange and trading of currencies in each region according to the time in which, for example, at the end of the trading day in the United States, the market begins trading in Tokyo again and so, while currency prices are constantly changing.

Currency Trading History:

In 1876, the idea of stabilizing the world's currencies began by linking them to the price of gold. The so-called gold standard was introduced. It was based on the consolidation of all paper currencies with solid gold. The idea was theoretically good; however, it resulted in stagnation and economic depression. The process, which led to the overthrow of this principle, and despite the decline in the price of gold, but was in fact eliminated this idea at the beginning of the Second World War; where the European countries did not have enough gold to support the paper currency, which was printed in large quantities for military funding .

In 1944, a decision was made to set fixed exchange rates and the US dollar was the only currency to be supported by gold. The system was known as Bretton Woods. In 1971, the United States announced that it would not support its currency And thus stopped the exchange of gold against the US dollar, and decided not to link it to the price of gold and ended the Bretton Woods system, and in 1976 the foreign exchange market or foreign exchange market, which resulted from the global acceptance of foreign exchange rates, Starts only m The mid-nineties solutions.

Currency Trading Agencies:

Currency trading works in several ways, including:

Banks: Banks trade currencies every day in large quantities. Some banks can trade billions of dollars a day, and sometimes currencies are traded on behalf of customers. Some traders also trade currencies for the private bank.
Individuals: Individuals participate in the foreign exchange market by exchanging money while traveling to another country for any purpose, whether at the airport or at the bank.
Companies: Different companies use the foreign exchange market to trade currencies and deal with other companies in different countries, in order to sell or buy goods or provide certain services to other countries. It is worth mentioning that an important part of the activity of the foreign exchange market comes from companies that exchange Currencies to deal with different destinations in other countries.
Investors: Portfolio investment companies require their clients to use the foreign exchange market to facilitate their transactions related to foreign securities.
Governments and central banks: The central bank of a particular country has an important role in the foreign exchange market, where the reason for the increase or decrease in the value of the currency in the same country may be through trying to control interest rates. Reserves owned by foreign currencies.

Forex Trading Skills:

Here are some of the skills one needs to achieve his goals in the Forex market:

Full confidence in the ability to achieve goals by following a particular strategy.
Flexibility in Forex trading, adapting to changing circumstances for success in achieving goals.
The ability to accept loss if it happens.
Dedication to work; so that the individual becomes a professional Forex trader.
Be patient while following a specific Forex trading strategy.
Focus to stay on the plan and not to deviate from the set track.
Ability to organize and walk on positive business habits.
Consider the exchange market in a logical and objective way.
Realism in dealing with the exchange market, and the tendency of the individual to become rich quickly; so as not to fall into the problems during the currency trade.
Stay informed, stay informed, and keep track of market events.
Control and not over-volume to avoid some undesirable things.