Hello traders! Today I will explain the different types of Forex exchanges and how everyone can participate in the market. The Forex market is the biggest one in the world.
It has over $5 billion of daily transactions and everything we do is involved. And, of course, the huge transactions happen with the banks and with the huge institutions that are exchanging really huge amounts every day. For the traders, we can access that via different platforms.
The most common are the trading platforms. This is where we exchange Forex currencies and we speculate on that in order to make profits.
This is what I show in most of my courses. And there are different methods to do that.
I am specialized in algorithmic trading which for me is the easiest way even for beginners. I travel a lot and at the same time, the Expert Advisors are trading on the Meta Trader platform.
Meta Trader platform
For the beginners, this is a platform that is most common especially with Expert Advisors. It is free. Most of the brokers provide it. So one of the ways to participate in the Forex exchange market is via the brokers. They offer us the platforms and then we have the chance to fund an account, for example, a $1,000 account and we can buy different currencies.
The most popular are the cryptocurrencies and I have recorded a couple of courses on the same.
We can trade stocks, we can trade futures, or we can trade commodities. Anything that you’ve heard about on the market is available on these platforms. But the Forex exchanges are not just the trading platforms.
Usually, what people do before they go on a vacation, they type on Google “Forex exchanges near me.” What they find is the exchange bureau where they exchange the local currency for the currency that they will need while traveling.
For example, if you are in Europe and you want to visit the United States, you will exchange some EUR for USD before visiting the US so you can have some cash with you. That transaction is Forex exchange. You buy one currency for another.
We don’t trade actual assets
Now, the thing is that when we use the exchange bureaus, the difference between the bid and the ask price is huge. Usually, we lose when we exchange one currency for another on the exchange bureaus or even in the bank.
The Forex exchange rates there are higher and, of course, this is what the bureau or the bank benefits. Same with the trading platforms. This is how the brokers benefit from the difference between the bid and ask price. But with the brokers, the Forex exchange rates are very small, usually a couple of points up to a pip.
So it’s a really huge difference when we are trading online and when we exchange currencies on the exchange bureau or in the bank before going on vacation. Again, the Forex exchange market is really huge. A lot of people participate, companies, banks, traders, investors, and all of these transactions make the markets move.
And we as traders take advantage of that and we benefit when we buy assets. So for the very beginner traders, when we do Forex exchange trading, we usually don’t buy physically the assets. We don’t buy physically the currencies like what we do in the exchange bureau or the bank.
The Expert Advisors is the easiest way to participate on the Forex Exchanges
We just trade on its value and this is called CFD trading, which stands for Contract For Difference.
So if I stick to the same example of EURUSD, if you’re visiting the States and you need some USD which you buy and you sell EUR, on the trading platform if you buy EURUSD, let’s say at the price of 1.1050 and then the price goes to 1.1150, there are these 100 pips of distance which you will benefit.
And, of course, it depends what quantity you buy and how much will be your profit. The other way around, if the price goes down and you close the position, you will have a loss. But, one more time, we don’t buy physically the currencies like we buy them when going on a vacation.
And the good thing here with the Forex exchange trading is that we can sell even if we had not bought previously. For example, we can sell EURUSD at 1.1050, if the price drops to 1.0850, we will benefit 200 pips. This is how we can profit in both directions.
Same thing with Expert Advisors. For the beginner traders, these are the trading Robots. They open trades up and down. They buy and sell. And this way, we can benefit everyday trading on the Forex exchange market using the trading platforms, using Expert Advisors.
Learn how you can get from us a Free Expert Advisor.
Learn to do it before risking any money on the Forex exchanges
This is what I show in my trading courses at Forex Academy. So I hope this post was useful for the beginner traders who are just wondering what are the Forex exchanges and how it works. It’s really nothing complicated. If you are more interested, you can have a look at some of my professional courses.
And, one more time, I would suggest you go trading with Expert Advisors or Robots. This way I visit some beautiful places. Recently, I have been traveling a lot. I will keep recording videos on interesting topics. If you have any ideas about new topics, let me know in the comments below and I will make sure to record a video on the same.