The Foreign Exchange Market (Forex) has no central exchange location yet it is the largest financial market in the world. It is over 3x's the size of the stock and futures markets combined and operates via an electronic network of a banks, corporations and investors.
Foreign exchange consists of a simultaneous buying of one currency and selling of another. Currency is traded in pairs, in other words, one currency is traded for another. The major currencies are:USD — United States DollarEUR — Euro members EuroJPY — Japan YenGBP — Great Britian poundCHF — Switzerland francCAD — Canadian dollarAUD — Australia dollar
There are 2 types of investors involved in the Forex market.The first type of investor is the hedger. The hedger is involved in International trades and utilizes Forex trading to protect their interest in a transaction from adverse currency fluctuations. The 2nd type of investor is the speculator who invests in currency solely for profit.
Currency prices fluctuate due to a variety of economic and political factors. The major factors are: Interest ratesInternational tradeInflationPolitical stability
There are many reasons investors take a great interest in FX trading Some of the major reasons are: No feesNo middlemenNo fixed trade sizesLow transaction costHigh liquidityInstant transactionsLow margin / High leverage24 hour marketOnline access via online trading platformsAlways good opportunities to trade, unlike the stock market the market is never bullish or bearish.No one entity can control the marketNo insider trading can occur
To begin trading in the Forex market, an investor only needs a computer, a high-speed internet connection and an online trading currency account. A mini account can be opened for as little as $100.
These are some of the reasons why Forex trading has become quite popular in recent years. For more information on getting started in FX Trading visit http://www.fx-trading-guide.com/
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