Last update 2020.08.05
Forex is a market in which you can trade currencies that involves the purchase of one currency and the simultaneous sale of another. For example, the US dollar (USD) and Japanese yen (JPY) are known as the USD/JPY pair or symbol.
Due to the use of leverage, traders can earn or lose 100% of their capital in just a few minutes, making risk-management crucial.
Forex investors do not physically buy dollars or yen, but a monetary exchange ratio between them, based on the exchange rate for the USD/JPY. An investor that bought the USD/JPY will need to subsequently sell the pair to exit their trade and receive any difference as a profit or loss, depending on the appreciation of these currencies.
As the exchange rates for currencies (dollars, euros, pounds, etc.) vary freely, under the influence of political events or economic factors, there is potential for investment strategies that aim to profit from these fluctuations.
The forex market also allows protection strategies against exchange rate fluctuations, through the use of hedging. The ability to hedge can be particularly useful for those with income or expenses which are affected by a specific currency quote, such as exporters.
In the case of individuals, this need to hedge may arise when an investor knows they’ll have an expense in foreign currency at a future date, and wants to remove any exchange rate risk, or profit, in the case of a price change by that future date.
Who operates the forex market?
The forex market is the largest market in the world. According to the BIS –Bank for International Settlements – Forex has on average, a daily trading volume of $5 trillion (200 times bigger than NYSE).
The second point is that forex is a decentralized market and the trading operations are scattered across various financial centers around the world.
Since the forex market has no physically structured headquarters, it is simply based on an interconnected network of institutions, including banks. Forex market trading is formed by transactions between the financial institutions operating in it.
Forex is therefore an Over-The-Counter (OTC) market, as transactions are conducted directly between the parties electronically, including through telephone and internet networks.
Forex markets are open 24/5, trading almost all currencies in the world. The biggest forex trading volume comes from the major pairs, which includes the EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, and NZD/USD currency pair.
Who regulates the forex Market?
Despite being an international market, brokers that offer investments in forex are registered with government agencies in the countries in which they operate:
Is forex trading suitable for me?
Forex may not be suitable for everyone. It is for those who can afford to speculate with risk capital or who have a need to deal with foreign currencies, such as for their businesses.
In fact, people and companies interested in trading in currencies, such as importers and exporters, also operate in this market to meet their foreign currency needs, including hedging their currency exchange rate exposure.
Due to its peculiar characteristics, however, most of the trading volume is from large banks and institutions, and then from investors seeking to profit or speculate.
Speculators look for the more liquid currencies, in order to realize their strategies in search of better profitability, that is:
The most traded currencies, can facilitate the accomplishment of advanced trading operations.
In the past, only banks and institutional investors had access to the forex market.
With technological development and the increasing globalization of financial transfers, forex has become accessible to individual retail investors at an increasing rate over the last few decades.
You don’t need to be a professional to invest like one in Forex. With Wiseinvest we believe you can reach returns above the forex market average, while saving time and potentially nights of sleep.
The best way to trade forex
There are two ways to invest with our AI in forex:
1. Automated with AI-Trading. Check out the 3 steps to trade automated with our AI.
Don’t you have a broker account yet? Our AI is integrated to trade automated with the broker Oanda. Click here to open an account.
2. Manually with AI-Signals.
Wiseinvest also provides AI forex signals that perfectly fit into MT4, MT5 and any trading platform. To trade with our AI forex signals, you must simply copy the data you receive from each real-time signal into any forex brokerage account of your choice.
There are five unique variables for each AI signal, and each must be copied exactly, in order to match the performance of the signal as close as possible.
Each AI signal alert consists of the following five data points:
- Symbol (forex pair)
- Direction (long or short)
- Position size (number of units or lots)
- Take profit (price level to exit with maximum gain)
- Stop loss (price level to exit with maximum loss)
You can trade forex with our free forex signals clicking here, or with our Premium subscription that provides you unlimited AI signals and automated AI trading in partner brokers. Whether you are a beginner or a Professional forex trader, our AI trading system can help you save time and improve your trading performance. Get started with free AI.
Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.
The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. The forex broker Fxcm warns that 69.66% of retail forex traders lose money trading CFDs.
The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.