What Exactly IS The Forex Market?

If the video is a bit over your head, I wanted to provide a few additional notes to give you a true beginners introduction to the Forex market. If you are somebody interested in getting started trading from home, you may have heard that the Forex market is a good place to get started. In fact, there are some Forex traders who make millions of dollars without trading any stocks at all!

But, before we delve into talking about forex trading, let us talk about the foreign exchange market. In essence, the foreign exchange market is is where currency trading occurs. Because currencies are valuable to majority of the world’s populace, there is a need for currency exchange to be carried out so that foreign trade and business can progress and develop.

For instance, if you make your home in the U.S. and you wish to purchase wooden tables from the Philippines, this transaction will require either you or the company that you will be purchasing the tables from to pay the Filipinos for the tables in Philippines pesos (PHP). In order for this to happen, the U.S. importer would have to engage in exchanging the equivalent value of USD into pesos.

The same applies when one is traveling. It is not possible for an American tourist to pay in dollars when in London, for the simple fact that the local currency is different. Be that as it may, it is essential for the American tourist to exchange his or her dollars into the local currency, which is the Great British Pound or GBP. This is the basic premise and necessity of forex trading.