Trading the FX market – what and how
We have talked quite a lot about where it is possible to trade but wait! We totally forgot to discuss what is possible to trade and how it is possible to place trades. Let’s fill this gap immediately.
FX instruments
You probably heard that the FX market is the largest market in the world, with a daily turnover of over 2 trillion dollars. But have you ever wondered what instruments are traded in such enormous quantities? Do you imagine piles of cash or gold coins? Maybe instant transfers of money from one bank account to another?
No, of course, this is not the way this market operates. When we say forex we generally mean trading obligations to deliver one currency for another currency.
If I come to a currency exchange shop and exchange €100 for the equivalent amount of British pounds, then such a transaction is done immediately. My obligations to deliver the euro as the seller and the shop’s obligations to...
