Foreign Exchange Trading

Today we are commencing an online guide to all things related to the ever popular Foreign Exchange Market, a.k.a. Forex. First things first. Let's begin by breaking down all the terms you will need to know to get yourself started in the wonderful world of Forex.

What is Foreign Exchange Trading?

Basically, foreign exchange trading occurs in a market when one currency is traded against another. For example, a United States Dollar can be traded against a Japanese Yen, or a Euro can be traded against a British Pound.

The Largest Market in the World

The foreign exchange market is the largest market in the world, with daily worldwide trading exceeding $1.9 trillion (that's over $1,900,000,000,000!). A highly varied group participates in this trading – from central banks to governments, from other financial markets to individual speculators. Everyone is invited to participate.

Furthermore, as an individual investor you can start with a very small investment, yet trade with very big money thanks to leverage.

Unique Trading Hours

Engaging in Foreign Exchange trading is different than investing in any other market. First of all, the hours of operation are totally different. Because people all over the world are trading their currencies at their local time, for five days straight, the foreign exchange market is open 24 hours a day, closing only for the weekend.

Enormous Volume and Global Participation

The sheer volume of trading is enormous, and the types of traders are tremendously varied – encompassing people from all parts of the globe.