Foreign Exchange (Forex, short for Foreign Exchange) are not traded on a centralized exchange. Therefore, there are no opening times, no stock exchange fees, no stock exchange rules, no supervision by the stock exchange committee, no “fair” price, etc. The currencies are traded directly between banks or brokers to set prices jointly. As the foreign exchange markets are very large, the prices are very transparent and very small spreads.
Foreign currencies can be traded continuously. Most brokers offer from Sunday evening to Friday evening prices. The Foreign exchange Currency is set in pairs, the so-called foreign exchange trading contracts or cross rates. Standard agreements have a value of 100.000 units in the reference currency. Some brokers offer also mini contracts with a base value of 10.000 units.
The latter are ideal for learning about the Foreign exchange trading because of the small contract losses remain always low, even at extreme rates. To open a Foreign exchange position, you must keep a certain percentage of the underlying asset on your account, usually 1%.
