Forex trading is having many career opportunities as it is easily accessible by traders from all around the world. Currency trading is also used to denote forex trading. It is about being your own boss and making money with proper knowledge about worldwide currencies.

What Is the Forex Market?

Trading in currency pairs using the rates determined by the foreign exchange market is known as currency trading or forex trading. Traders buy and sell currencies at the determined currency exchange rate. When a trader sees any profitable opportunities, forex transactions are executed. Sometimes currency exchange is also mandatory.

What Is a Pair in Forex?

Forex trading requires currency pairs for trading. A pair indicates how many units of quote currency can be bought and sold against one unit of the base currency. A base currency is a currency that is listed first in a pair and a quote currency is listed second in a pair.

Traders cannot trade using only one currency, two currencies are important for trading in the foreign exchange market. The currency pairs are also classified into three different categories that are:

Minor Pairs

Minor pairs are also known as cross currency pairs and these pairs involve currencies of strong economies. They are less liquid pairs of the foreign exchange market.

Major Pairs

The currency pairs in this category include the US dollar against other IQ Option trading India of strong economies across the world. These are highly liquid pairs of the foreign exchange market.

Exotic Pairs

These currency pairs are made of currencies of emerging economies. Their liquidity is very low in the foreign exchange market.

What Are the Advantages of Currency Trading?

The foreign exchange market is the largest financial market in the world. Many opportunities are available for forex trades from which they can earn potential profits. Forex traders are having multiple advantages of currency trading that are as follows:

24 Hours Availability

The forex market means the involvement of currencies from all over the world. It also means that the reach of the foreign exchange market is worldwide. The foreign exchange market is available 24 hours a day and 5 days a week. It is the only market that can be traded 24 hours a day.

Higher Liquidity

When we talk about the comparison of the forex market with other financial markets. The number of participants is highest in the foreign exchange market. This ensures that the currency trading is highly liquid in nature. Large orders of buying and selling can be executed in the foreign exchange market easily.

The best part of the market is that the prices or exchange rates do not deviate due to large orders. It ensures that the market cannot be manipulated. The exchange rates change due to other factors of the market.

Low-Cost Trading

Currency trading has a low commission or brokerage charges on orders of the foreign exchange market. Most of the forex brokers do not charge commission they only charge spreads between two currencies.