| The Forex refers to the foreign exchange | | | | these "big boys" could play the Forex trading |
| currency market. It is the largest financial | | | | game. To get started, you needed to satisfy |
| market in the world, trading more than $2 | | | | an initial capital requirement of $10 to $50 |
| trillion on average each day. Comparing an | | | | million. These high capital requirements and |
| average day of the Forex, the average daily | | | | lack of access kept the doors shut to most of |
| volume of $25 billion on the New York Stock | | | | us. |
| Exchange begins to look like chump change. It | | | | |
| does not take long before you begin to | | | | With expansion of the Internet, online Forex |
| appreciate the vast size of the foreign | | | | trading firms began to offer trading accounts |
| exchange market. | | | | to 'retail' traders. With reduced capital |
| | | | requirements and online access all you need |
| Currencies are traded in pairs on the Forex, | | | | to get started is a computer, a high-speed |
| which involves the simultaneous buying of one | | | | Internet connection, and an understanding of |
| currency and the selling of another. You may | | | | the Forex market and how to trade it |
| trade the Euro dollar and the US dollar (EUR | | | | profitably. |
| USD) pair or the British pound and the | | | | |
| Japanese Yen (GBP/JPY) pair, as examples. | | | | The Forex market comes with a series of |
| | | | additional benefit, which make it |
| In effect, you are buying the currency of a | | | | irresistable to traders. There are only seven |
| particular country. This equates to taking a | | | | major currency pairs. Compare that to |
| position in that nation's economic growth. | | | | tracking thousands of stocks. There are no |
| The price of the currency is a direct | | | | commissions or exchange fees. Your broker |
| reflection of what the market thinks about | | | | simply makes their money from the difference |
| the current and future health of that | | | | on the bid / ask spread. This is also the |
| nation's economy. If you buy the Japanese | | | | most liquid market anywhere. |
| Yen, you are in effect buying a share in the | | | | |
| Japanese economy with the belief that their | | | | There are other benefits, but you probably |
| economy will expand in comparison to the | | | | have an idea as to why currency trading is |
| economy of other counties. | | | | quickly growing in popularity with retail |
| | | | traders. The obstacles to accessing these |
| The Forex has no physical exchange or central | | | | benefits have been largely eliminated, with |
| market. Instead, it is an Over-The-Counter | | | | knowledge the only barrier between you and |
| (OTC) or 'Interbank' market. The entire | | | | forex trading profitability. |
| market is run electronically, within a | | | | |
| network of banks. | | | | If you wish to learn more about the basics of |
| | | | how the foreign exchange market works, you |
| The market is available continuously open. | | | | will find numerous resources on the Internet |
| This 24-hour market is achieved by a | | | | and can access reliable information from |
| transitioning of trading activity around the | | | | reputable Forex brokers. There are many good |
| globe. Trading begins in Sydney, Australia, | | | | books on the subject available at very |
| then shifts to Tokyo, Japan. Next, London, | | | | reasonable prices. |
| England takes over and then "passes the | | | | |
| baton" to New York. As New York shuts down, | | | | Once you understand the basics and choose to |
| Sydney is opening for business. | | | | take the next step, you will want to invest |
| | | | in a solid trading course from a reputable |
| The foreign exchange market was not designed | | | | source. With good instruction, there is very |
| for retail traders, but was originally | | | | little that stands between you and the |
| intended to be used by bankers and large | | | | ability to benefit from trading the foreign |
| institutions. Prior to the late 1990's, only | | | | exchange currency market. |