Starting Forex Trading: What is Forex?

This explains that the size of the forex market continues to expand. Among them, the spot market accounts for about a third of forex market transactions.

The forex market can be simply defined as a product that can be exchanged equally for assets such as other currencies, gold and crude oil.

First, you need to know what foreign exchange (forex) transactions are.

Just go to the bank and exchange foreign currency or deposit it, and you can say that you have become a part of the forex transaction. If you deposit foreign currency into the bank, of course youre doing foreign exchange transactions. Let me give you an example.

A person named A wants to exchange 100,000 HKD for CAD and travel to Canada. So A exchanged 100,000 HKD for 100,000/7.537 = 13,267.88 CAD, and 5,000.0 CAD remained after A returned home. A went to the bank to exchange Canadian dollars for Hong Kong dollars again and exchanged 5,000.0 CAD for 5,000.0 x 7.48650 = 37,432.5 HKD. As above actions correspond to transactions in the foreign exchange market.

However, for some reason, A canceled his travel plan the day before his departure, and A went to the bank a month later and exchanged 13,267.88 CAD for Hong Kong dollars. However, A found that the forex market price of the computer was different.

So A exchanged 13,267.88 CAD for 13,267.88 x 7.58610 = 100,651.5 HKD, and earned 651.5 HKD in this foreign exchange transaction process.

All of the above actions are a form of forex transaction.