What is traded in the forex market? The simple and straight forward answer is money. Forex trading is the simultaneous buying of one currency and the selling of another.
Currencies are traded through a broker or dealer like EToro, and are traded in pairs; for example the euro and the US dollar or the British pound and the Japanese Yen.
The Forex market is considered an Over-the-Counter or 'Inter bank' market. This is due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.
Until 1990, the minimum requirement to open a forex trading account ranged from $ 10 million - $50 million. It was only intended to be opened for bankers and large financial institutions. Due to the rapid growth of internet, now these large financial institutions are offering retail accounts to us.
Our broker eToro is one of them. Their institution is called "retailfx" and one of the largest in the industry. They are regulated by all the relevant financial authorities through out the world and they have the capacity to offer us a retail trading account with a minimum deposit of $50.
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