What is Forex Exchange? Forex Exchange is also known as Forex Currency Exchange. The easiest way to define it is that it is a multiple purchase and sale of a currency in exchange for another country's currency. The world currencies have no fixed rate of exchange but they are always fluctuating such as the currency pairs like Euro-Dollar, Dollar-Yen and many others. 90% of trading per day are currencies-trading.
Forex Exchange usually deals with four major pairs: First, Euro and US Dollar. Second, US Dollar and Japanese Yen. Third , British Pound and US Dollar. Lastly, US Dollar against Swiss Franc. In short, they are EUR/USD, USD/JPY, GBP/USD, and USD/CHF. These are used to assign the pairs accurately.
These are the four major pairs that are considered as Forex Exchange Market's "Blue Chips". No dividends are made through owning and exchanging currencies. What is well-known is the "buy-low" and "sell-high" that gives profit for Forex Exchange.
So how do people exactly make money with Forex Exchange? To give a simple illustration: If you foresee that one currency would get higher to another, you can exchange for the second one and wait for it to go up before exchanging back to the former currency to take profit.
In Forex Exchange, the Forex Market does not fluctuate dramatically as much as the stock market where it can be hugely volatile. The daily turnover for Forex Exchange Transactions are about $1.2 Trillion. It has not stopped. Transactions were made even during the 911 when major disasters happened.
Forex Exchange is often described as a dangerous sea where lots of sharks swim. On the other hand, an initial $1000 might hypothetically bring you $1,000,000 in return. The problem with Forex nowadays is that many newbies in Forex Exchange, as much as 95% of them lose a lot of money at Forex. Only 5% of them made profit and less than 1% of them made it big with Forex Exchange.
You see, Forex Exchange was originally an idea for banks and later on, transnational corporations and individual traders are opened to changing the currencies they possess into another one. At the Forex Exchange Market, you can trade up to 1:400 leverage which means you will get $400,000 sum to trade with, after invested $1000 onto your account.
With this statistical analysis, even experienced Forex Exchange Traders think that Forex Trading is dangerous and are careful with it even though it is as simple as the simple illustration we made.
Forex Exchange isn't that gloomy after all because there are however, strategies and ways of making money through Forex Exchange without using such high leverages.