The currency market (also known as FX or Forex) is a global market for exchanging national currencies against each other.
Due to global access to trade, commerce and finance, Forex markets tend to be the largest and most liquid asset markets in the world.
Currencies are traded in pairs at exchange rates. For example, EUR / USD.
There are Forex markets as point (cash) markets as well as derivative markets offering stock markets, futures, options and currency exchanges.
Market participants use Forex to hedge against international exchange rate risk and interest rates, speculate on geopolitical events and diversify securities, among several other reasons.
In the past, foreign exchange transactions were conducted only through operating banks that could buy and sell foreign currency; Gradually, however, banks began to prioritize some customers to increase their profits; Other financial institutions, multinational corporations, and mutual funds followed suit.
Today, with the development and advancement of the Internet, people in the same conditions can collect and trade with speculators, investment companies and at any time exchange rates from different banks. For this reason, brokers were formed who in their own trading software, display the exchange rates in an instantaneous way, and customers transfer their order to the relevant broker through the same software. In fact, brokers are the intermediaries between personal traders (Traders) and the market, and the most important role of brokers is to transfer the trading orders of the trader to the global market.
Therefore, the first step to conduct transactions in the foreign exchange market is to choose a suitable broker, and to conduct foreign exchange transactions, individuals must sign a contract with their desired broker and deposit the amount they intend to invest in this market as a deposit to the broker’s account. This deposit actually supports the transaction and is opened in the name of the customer. In the next step, the broker assigns the username and password to the opened trading account, so that the client can conduct his foreign exchange transactions through the trading software on the brokerage line.