Well, you might have heard about the forex market where the participant can buy, sell, exchange, and take chances or gamble on currencies. Banks, commercial companies, investment management firms, Central banks, retail forex brokers, and investors make the forex market. Forex market is also known as one of the largest with over $5 trillion in daily transactions, pictures greater than the futures and equity markets altogether.
Forex market is also commonly known as a foreign exchange market, which is not led only by single market exchange. Still, a global network of computers and brokers from all over the world are also involved. The brokers of the foreign exchange market act as market makers and have the right to post bids and ask prices for currency pairs that contradict the most competitive bid in the market.
The interbank market and the over-the-counter market are the two levels from which the forex market is made up. In the interbank bank market, larger banks trade currencies for hedging, balance sheet adjustments on behalf of clients. On the other hand, in the OTC market, individuals trade via online platforms and brokers.
Some of the well-known leading companies are the big players in the forex market, where the US dollar is by far the most traded currency, creating near 85% of all the trades. Euro comes after the dollar, which creates almost 39% of all currency trades where is Japanese yen holds its position at the 3rd rank at 19%. (Note: the overall figure does not get a total hundred percent as there are two sides to every FX transaction).
As per the 2018 Greenwich associates study, Citigroup and JPMorgan Chase and co. The two leading banks in the foreign exchange market, adding for more than 30% of global market share. Also, UBS, Deutsche Bank, and Goldman Sachs made up the remaining positions in the top 5.
When the operating market of the forex market is quite interesting as from Monday morning in Asia to Friday afternoon in New York, the foreign exchange market is a 24-hour market that means it works consistently with any shut. Contradicting from markets like equities, commodities, bonds, which all get shot for some time, mostly during the late afternoon in New York. However, so many things are exceptions but some advent of market currencies shuts down for a while during the trading day.
Well, in the market, people often ask a comment question i.e. what are some of the hidden secrets of the forex market? It's quite common that you might also have thought this several times if you are reading this article. Let's have a look at some of the hidden secrets of the forex market:
1. Some so many traders fail to achieve the profit.
2. You will find several forex broker groups in the market. But remember that every broker in the market is not reliable, and you cannot trust all of them. So, you have to discover the most suitable in the market.
3. There are so many random signal providers in the market who are not trustworthy. Hence, in such a condition, it's your responsibility to beware of it.
4. Have you ever thought that what might be deadly for you in the Forex trading market? Of course, it's dealing desks.
5. Several websites claim to supply you with various automated trading systems signals that can gain extensive profits over a short period. Sometimes even indicators predict market moves with 100% percent certainty.
6. The most hidden secret of the foreign exchange market is that the many automated trading systems don't work. They have been developed by marketers and created in such a way to sell and not work.
7. Licensing of foreign exchange market brokers plays a very significant role, but you should remember that not every license comes with the same degree of reliability, trust, as well as security.
8. Many brokers of the foreign exchange market do not want you to know that license from offshore regulatory bodies cannot be of any use sometimes. That's the reason that you should settle for a broker that is running by an authority that is known widely, such as financial conduct authority (FCA) from the UK.
9. Trading with admiral markets can be risk-free.
Well, these are some of the secrets which are widely said about the foreign exchange market.
Below are some of the tips beginners, given by experienced forex investors who have been trading for a very long time now:
1. Go for the currency pairs that include the US dollar. It makes it easier to enter or exit positions at your own will.
2. Do some analysis to find the currency pair consisting of a lot of profit potential and is the least volatile.
3. Keep a tab of the trends in the forex market and decide your exit points for safer trading.
4. Review the charts every day.
There have never been any perfect trading strategies just because the market will never be predicted all the time accurately. It might often be possible that sometimes any strategy gets fail, and stop points are reached before profits are realized. Consistency in backtesting, remaining patients, and setting stops are the top-secret of forex success. If you are a beginner, you should definitely take your time to research the market and know about it better. The Forex market is a very risky market, and the one, who is not aware of it, might fall for fraud. Try finding a reliable forex broker who helps you to understand the market and helps you to make a profit through forex trading.