The constant growth and availability of trading opportunities have made things quite competitive in the financial market. Therefore, it is no longer easy to just decide and enter the trading world, one has to take care of quite a lot of things before embarking on this trading journey. Among those things, one has to make sure that enough resources are available and see if they have the time to commit to it. After considering all of this, next, come benefits and drawbacks involved with the trading market one have chosen. It is really important for a trader to first consider the advantages and disadvantages of the chosen market before going ahead with their time and resource investment in the trading.
If you are a trading pro or someone who is planning to start this new venture, all the above information might come as a piece of bad news for you but don’t you worry as we have something good for you as well. If you are looking for the potential markets for trading and you do not have enough time to invest neither have enough resources to start with, you are still in luck with currency trading. It also goes by the name of forex trading, which is a portmanteau for foreign exchange and it involves the trading of currency exchange. Relatively, this trading does not require much of investments, only demands a couple of subscriptions of a few websites that give information on it and learning classes from forex trading experts like Rob Booker which we will cover later in the article.
What is forex trading?
Forex trading, also known as foreign exchange trading, involves exchanging one currency for another that results in profit gain. This exchange is both buying and selling of a base currency with the quote currency. The base currency is the transaction currency that decides the worth of the currency pairs and the quote currency is a currency that is bought with that base currency rate. A currency pair is a term given to the pair of base and quote currency in the forex market that is denoted with the abbreviation of each currency, for example, EUR/USD that shows currency pair of Euro and United States Dollar. There are four categories of currency pairs based on the rate on which they are traded.
- The first in the list is major pairs that involve seven currencies that are the most traded ones in the forex trading. These pairs are USD/CHF, USD/JPY, GBP/USD, and EUR/USD. The main feature of this category is that all of these pairs include USD either as base or quote currency.
- The second in the list is minor pairs that are traded less frequently and involve pairs of major currencies except for one major currency that is USD. These pairs are GBP/JPY, EUR/GBP, EUR/CHF, etc.
- The third in the list is exotics that are pairs of one major currency and one emerging currency. USD/PLN, EUR/CZK, EUR/TRY, USD/SEK, USD/SGD, USD/DKK, these are some of the pairs included in this category.
- The last in the list is regional pairs that are pairs of currencies belonging to the same region. For example, AUD/NZD is a currency pair between Australia and Newzealand, both countries are from the same region that is Australasia.
Different types of Forex market
The forex market is divided into three categories based on the time of the trading transaction. Some of the forex exchange takes place on the spot while some take place in the future depending upon the agreement between the two parties. Let’s dig deeper and find out what are these three forex market types.
- The first market is the Spot forex market which involves the exchange of currencies at the same time as trade settlement. It happens then and there and involves physical exchange. It is processed on the spot that is why it is called the spot forex market.
- Forward forex market is the second in the list and involves contract agreement of currency exchange at a set time in the future. In this type of forex trading, the agreement is drawn which binds the parties in a contract of buying or selling the currency in the future at a specified current rate. In this trading, the exchange rate is locked in and one cannot walk away from the specified rate in the future when the exchange finally occurs.
- The last is the future forex market that involves buying and selling the currency on a set future date in a preestablished estimated exchange rate. The future forex trading includes an agreement having an expiration date that binds one buying party and one selling party in a contract, and it is more standardized according to set rules than the forward forex trading.
Rob Booker Review
If you are a novice in the trading world and especially in the forex trading world, you must invest some time in learning all about the market you are intending to invest your resources in. You should be aware of all the whats and hows of the industry and have an ample amount of information about the laws and market to compete with the competitors. For this purpose, you can subscribe to reliable websites or can read blog articles. But nothing beats the experience and knowledge you gain when you seek training from a professional. For trading or forex trading, you have the ultimate trading guru, Rob Booker.
Rob Booker is a well-known trainer in the trading world and releases 90 podcasts, telling people about the trading world in detail. He comes with 17 years of experience in forex trading and is followed by 800 followers who are devoted to him. Apart from podcasts, Rob Booker has introduced a mentoring program that offers features like newsletters, trading robots, webinars, indicators, trade alerts, lecture videos, and live chat that is available 24/7. If you want to know about the usefulness of the Rob Booker program before going for it, you can check out this Rob Booker Review.