The ins and outs of the forex market
When you think about financial markets, you might think about stock markets, like the Johannesburg Stock Exchange. But in doing so, you’d be ignoring the world’s largest market.
market is the global market for trading the world’s currencies.
So how big is it compared with stock markets?
On average, the forex market trades around $5.3 trillion a day. The JSE trades just $200 billion a year.
Even in comparison to the world’s largest stock exchange, the forex market is huge. Just take a look at the graphic below. This shows you the size of the forex market compared with the New York Stock Exchange…
The forex market is an interbank market. It isn’t a physical trading place like a stock market, but operates through a global network of computers, which the banks regulate.
How to trade the forex market
If you want to trade the forex market, you need to have a solid understanding of how it operates. Read this article for more information on the basics of forex trading.
Once you’ve decided that forex trading is something you want to do, you’ll need to hone your technical analysis skills to uncover trades. Then it’s a case of opening an account to trade.
You have a number of options and it depends on what currencies you want to trade. If you decide to trade the world’s major currencies, which are the most liquid and probably the easiest to trade, then you need a spread trading account.
From as little as R500 you can start trading. But before you jump in, make use of the various demo accounts on offer so you can practice and hone your trading strategy.
So there you have it. If you want to trade the world’s biggest financial market, forex trading is for you.
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