Participants in the Forex or foreign exchange markets, such as banks and individuals, can buy, sell, or exchange currencies for both hedging and speculative purposes. The foreign exchange (forex) market is the world's largest financial market, comprising banks, commercial companies, central banks, investment management firms, hedge funds, retail forex brokers, and investors. A forex market operates around the clock.
Forex traders forecast changes in currency prices in global markets and take positions in currency pairs to profit from changes in currency demand. They can trade on behalf of financial institutions, clients, or individual investors. Forex traders must be comfortable with large data sets and rely on a combination of fundamental and technical analysis to predict currency price movements in order to make profitable trades
A retail investor is a private, non-professional investor who uses brokers or other investment accounts to buy and sell stocks or funds. Retail investors make smaller investments than institutional investors and buy securities for their own accounts. The availability of trading instruments and financial information has led to a huge increase in retail investment.
A currency's exchange rate is influenced by a variety of factors. The main risk, among the other key considerations, is a negative change in the exchange rate. If not chosen and monitored on a timely and regular basis, this can result in huge losses for investors. As a result, currency trading is regarded as equally volatile as other financial assets such as stocks, bonds, and mutual funds. Whatever your trading style, you should keep a close eye on your leverage and monitor market movements on a regular basis to avoid or minimise forex losses.