What is Forex Trading and how does it work?

Almost everyone has heard the name Forex or Forex trading. But many people do not know much about how Forex works or how to do Forex trading. Let us know what is Forex Trading, details about Forex Trading activities, risks, validity, etc. This post is not intended to encourage or discourage you in Forex. Rather, it is to inform you of some information so as to increase the scope of your knowledge.

What is Forex Trading? 

Forex of Forex trading means Foreign Exchange which means the exchange of foreign currency. In other words, the exchange of foreign currency in simple language is considered as forex trading. Also known as Foreign Exchange FX and Forex. As of April 2019, 6.7 trillion foreign exchange settlements are made every day worldwide. The Forex market is the largest financial market in the world.

Foreign exchange is so popular in popular sectors like commerce, trading or tourism that the exchange of one country's currency for another is closely linked.

##Are you rushing to make money online? Then this article is for you!

How Forex Trading Works

Let's take a closer look at the workings of Forex trading. Suppose 'A' lives in America. In that case, if he orders a product from France, he will have to pay in euros. But its currency is the US dollar. In that case he can decide to convert the dollar he has into a currency equal to the Euro with the help of Forex trading. 

People from France who go to Egypt to see the pyramids again will not be able to pay for tickets through their country's currency. In that case, the French visitor will have to use the euro he has by converting it into Egyptian pounds. These are very simple examples.

The best advantage of the Forex market is that there is no need for a central marketplace for foreign exchange. Foreign exchange operates electronically, through Over the Counter (OTC).

Since there is no central marketplace for foreign exchange or forex trading, this market is open 24 hours a day, 5 days a week (+ more half days). However, due to the time zone, the Forex trading market fluctuates. For example, in the United States, when the trading market is closed, in Tokyo and Hong Kong, the trading market of that day starts. Which means the forex trading market is active at any time. And there is always the possibility of constant price change.

What is forex trading and how it works

Things You Should Know About Forex Trading

It is very important to know some important terms or topics in Forex trading. Some of the important issues about Forex trading are discussed below.

Forex Account 

Currency is exchanged using Forex account. There are three types of forex accounts depending on the lot size. E.g.

  • Micro Forex Account: This type of account can be used to trade up to 1000 per lot.
  • Mini Forex Account: This type of account can be used to trade up to 10,000 per lot.
  • Standard Forex Account: This type of account can be used to trade up to, 100,000 per lot.

Note that the more trades can be made per lot, the larger the currency can be traded for leverage.


Ask is the minimum price at which a customer is interested in buying a currency. Ask is often higher than the bid price.


Bid is the price at which a seller is interested in selling currency. A market maker places a bid at the buyer's request. The bid price fluctuates according to the demand.

Bare Market

The market in which the prices of all currencies fall is called the Bear Market. The bear market is a major indicator of the downturn in the trading market and the economic crisis.

Bull Market

Bull Market is a trading market where the prices of all currencies rise. Bull market refers to the improvement of a market and the improvement of the global economy.


The capital borrowed to increase profits is called leverage. The forex market is affected by high leverage. Traders often use leverage to boost their positions.


Currencies are basically exchanged in lot form. That is, when a certain amount of money is traded, that money is collectively called lot. The larger the size of the lot, the greater the probability of gain and loss. The standard, mini, micro accounts we talked about above are also used as lot size.


The money kept in a separate account for currency trading is called margin. Margins play a huge role in keeping the broker financially viable and able to meet the obligations of the trader.

Benefits of Forex Trading

Why do forex trading or why do forex - if this is the question, then the answers will naturally attract anyone to forex trading. 

First of all you don't need to own a lot of money to trade Forex now. Anyone can start working as a trader in Forex trading with just 50$ investment. The demand and popularity of Forex trading is increasing day by day.

Again, you do not need any tools to trade Forex. You can start forex trading with any device connected to the internet, such as computer, tablet, or even smartphone. Forex trading can be a way to earn money with a mobile .

One of the great things about the Forex trading market is that no one can easily manipulate or manipulate this market.

Since there is no fluctuating price in the Forex trading market, it will not take long for the trader to make a profit later if he suffers a loss. As it is a global market, trading can be done from anywhere in the world. Besides, since there is no proprietor of Au Market, there is freedom to buy and sell directly.

If you have time and knowledge about Forex trading, then it is a matter of time before you can become financially successful by trading Forex.

The risks of forex trading

In the case of Forex trading, the risk remains. We already know that the Forex trading marketplace is always in flux. That's why you shouldn't go into this business without fully understanding forex trading. So if one wants to start forex trading, then one must know the details of forex trading.

Earnings from Forex trading

If you are one of the curious about online income , you may have heard about Forex trading before. However, as simple as it may sound to make money in Forex trading, it is actually quite difficult to do so.

If you want to earn money by trading Forex, you need investment and time. Putting these two essentials together then you need to be up-to-date about the Forex trading market. If one wants to run forex trading as a side business, then one has to analyze the market and make the right decision.

Is Forex Trading Legal in Bangladesh?

According to the Foreign Exchange Regulation Act, 1947, the exchange of foreign currency in Bangladesh can only be done by a dealer or money changer authorized by Bangladesh Bank. In other words, if someone trades in Forex without the approval of Bangladesh Bank, then it is illegal and a punishable offense.

In a word, we can say that forex trading is not illegal in Bangladesh, but it must be in accordance with the rules of Bangladesh Bank. You can contact Bangladesh Bank to know more.

Post a Comment

Previous Post Next Post