FOREX Trading :: Overview

FOREX Trading :: Overview Foreign exchange, forex or just FX are all terms used to describe the trading of the world's many currencies. The forex market is the largest market in the world, with trades amounting to more than USD 1.5 trillion every day. This is more than one hundred times the daily trading on the NYSE (New York Stock Exchange). Most forex trading is speculative, with only a few percent of market activity representing governments' and companies' fundamental currency conversion needs. Unlike trading on the stock market, the forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic networks all over the world. The main centres for trading are Sydney, Tokyo, London, Frankfurt and New York. This worldwide distribution of trading centres means that the forex market is a 24-hour market.FOREX trading is a very specialized form of day trading. (Day traders invest by buying and selling securities, or opening and closing their market positions, on the same day.) Because of the high margins available in FOREX, investors can control large amounts of currency with relatively small outlays of actual cash. This leverage creates the potential for huge profits as well as huge losses. The would-be FOREX trader must remain aware that, just as with any other investment vehicle, financial loss is always a possibility. The FOREX market provides a variety of unique and attractive investing opportunities. Study the articles of this section carefully, as well as other information and tools for the FOREX market. Safeguard yourself by becoming familiar with various risk management concepts. You'll need an account and trading platform with a reputable broker in order to begin trading. One such firm, known as Easy-Forex, offers full-service-, customizable-, and commission-free trading and support based on your experience and desired activity level. They give you full control over your account, even leverage and spread amounts.A currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the Euro/US Dollar, or the GB Pound/Japanese Yen.). The most commonly traded currencies are the so-called “majors” – EURUSD , USDJPY , USDCHF and GBPUSD . The most important forex market is the spot market as it has the largest volume. The market is called the spot market because trades are settled immediately, or “on the spot”. In practice this means two banking days.