Forex trading is the process of speculating on currency prices to potentially make a profit.
Wondering what is forex trading, what are forex market trends, and what currencies are more valuable in the market? In that case, you are in the right place. Here we have mentioned a few aspects of forex trading that you need to know.
What is Forex?
Forex is a global financial market that allows you to trade currencies. If you trade one currency for the other, that is stronger, and you will make a profit. Also, for trading, you need to purchase a currency at the exchange rate that the government determines.
Trends in Forex Market
Bullish Trend
A bullish trend indicates an appreciating currency in the market. The Canadian dollar, the Australian dollar, and the New Zealand dollar tend to appreciate. Currencies like the Japanese Yen and the US dollar can be depreciated. The trader must be strategic in entering and selling when the market peaks.
Natural Trend
Natural trends mean that the market is not increasing or decreasing in value. It is not an indicator of economic uncertainty but the short-term byproducts of investors’ indecision.
Bearish Trend
During this trend, traders start to sell less-liquidated currencies for damage control. In this case, safe haven currencies get in demand and strengthen the bearish market. Also, investors try to sell high and buy low when prices fall in the bearish market.
Major Currencies of the Forex Market
Here are the major currency pairs in the forex trading market.
- USD/JPY
- EUR/USD
- USD/CHF
- GBP/USD
Minor Currencies
These are cross-currency pairs that don’t involve the US dollar. This includes:
- EUR/GBP
- GBP/CAD
- CHF/JPY
- GBP/JPY
- NZD/JPY
- EUR/AUD
Bottom Line
In a nutshell, forex trading is precisely the trading of currency in a way that can help you earn profits. Understanding its trends and major and minor currency can give you an idea of how the market works.
