Forex Trading Guide                       Bookmark This Page

Welcome to Forex Trading Guide

Article

Learn Currency Trade - Intro to The FOREX Market
Anna Rowe

The Foreign Exchange Market – better known as FOREX - is a world wide market for buying and selling currencies.

It handles a huge volume of transactions 24 hours a day, 5 days a week. Daily exchanges are worth approximately $1.5 trillion (US dollars). In comparison, the United States Treasury Bond market averages $300 billion a day and American stock markets exchange about $100 billion a day.

The Foreign Exchange Market was established in 1971 with the abolishment of fixed currency exchanges. Currencies became valued at 'floating' rates determined by supply and demand. The FOREX grew steadily throughout the 1970's, but with the technological advances of the 80's FOREX grew from trading levels of $70 billion a day to the current level of $1.5 trillion.

The FOREX is made up of about 5000 trading institutions such as international banks, central government banks (such as the US Federal Reserve), and commercial companies and brokers for all types of foreign currency exchange.

There is no centralized location of FOREX – major trading centers are located in New York, Tokyo, London, Hong Kong, Singapore, Paris, and Frankfurt, and all trading is by telephone or over the Internet. Businesses use the market to buy and sell products in other countries, but most of the activity on the FOREX is from currency traders who use it to generate profits from small movements in the market.

Even though there are many huge players in FOREX, it is accessible to the small investor thanks to recent changes in the regulations. Previously, there was a minimum transaction size and traders were required to meet strict financial requirements. With the advent of Internet trading, regulations have been changed to allow large interbank units to be broken down into smaller lots.

Each lot is worth about $100,000 and is accessible to the individual investor through 'leverage' – loans extended for trading. Typically, lots can be controlled with a leverage of 100:1 meaning that US$1,000 will allow you to control a $100,000 currency exchange.

There are many advantages to trading in FOREX, including:

- Liquidity: Because of the size of the Foreign Exchange Market, investments are extremely liquid. International banks are continuously providing bid and ask offers and the high number of transactions each day means there is always a buyer or a seller for any currency.

- Accessibility: The market is open 24 hours a day, 5 days a week. The market opens Monday morning Australian time and closes Friday afternoon New York time. Trades can be done on the Internet from your home or office.

- Open Market: Currency fluctuations are usually caused by changes in national economies. News about these changes is accessible to everyone at the same time – there can be no 'insider trading' in FOREX.

- No commission Fees: Brokers earn money by setting a 'spread' – the difference between what a currency can be bought at and what it can be sold at.

How does the foreign currency exchange market work?

Currencies are always traded in pairs – the US dollar against the Japanese yen, or the English pound against the euro. Every transaction involves selling one currency and buying another, so if an investor believes the euro will gain against the dollar, he will sell dollars and buy euros.

The potential for profit exists because there is always movement between currencies. Even small changes can result in substantial profits because of the large amount of money involved in each transaction.

At the same time, it can be a relatively safe market for the individual investor. There are safeguards built in to protect both the broker and the investor and a number of software tools exist to minimize loss.

About The Author

Article by Anna Rowe, webmaster of http://www.1st-forex-online-trading.com that assists you with FOREX trading strategies, fund analysis and broker tips and offers foreign currency exchange techniques.

Forex trading News

Forex trading

Jan 09 - GBPJPY Decline Likely Extends Jan 08 - Trading Signals Buy Australian Against U.S. Dollar Jan 08 - Forex Trading Strategies Aggressively buy Japanese Yen Against US Dollar, British Pound, Swiss Franc, and Australian Dollar Jan 08 - EURUSD ...

GBPJPY Decline Likely Extends - DailyFx

Jan 08 - Trading Signals Buy Australian Against U.S. Dollar Jan 08 - Forex Trading Strategies Aggressively buy Japanese Yen Against US Dollar, British Pound, Swiss Franc, and Australian Dollar Jan 08 - EURUSD Resistance at Former Support Jan 07 ...

Trading Signals Buy Australian Against U.S. Dollar - DailyFx

(*) This is the password you need to enter the hotComm room, not your FXstreet.com user account password. Discussion of previous Special Reports on FXStreet: Perceiving Forex Volatility through Descriptive Statistics (Parts I and II) How can traders ...

How to Get Started Trading Forex - FXStreet.com

An increasing number of people are now turning to forex trading as a means of generating revenue. However there is a lot to learn, so with that in mind, here are some of the basics you should know before you even think about trading forex with real ...

A Few Things You Need To Know About Forex Trading - Best Syndication

Author : PFSoft Ltd. ZURICH, Switzerland , Jan. 8 /PRNewswire/ -- In close collaboration with PFSoft, Forexone has released the ProTrader private branded trading platform entitled FXInfinity TRADEMONSTER. "PFSoft turned out to be the ideal partner ...

Swiss FX Broker Forexone Releases New Forex Trading Platform from ... - Earthtimes

Rate two-way and presses to highs as stops above the 1.3580 area are cleared; more noted above 1.3660 and 1.3720. Cross-liquidation continues but rallies back hard as official bids absorb offers under the 1.3350 area yesterday. Traders note sovereign ...

EURO USD Forex Trading Tips and Analysis for Day Traders - Top News India

Veteran Turtle Trader, Russell Sands, Will Auto-Trade For You. $6K Minimum. 100% Guaranteed. Automate Your FOREX Trading and Explode Your Profits TODAY! Double Your Money Each and Every Month. FAP Robot Eliminates the Guess Work in FOREX Trading ...

Forex News Trading - Colleyville Courier

RIO DE JANEIRO (Dow Jones)--Brazil's real closed stronger against the U.S. dollar Friday, in a relatively calm market with low traded volume. The real closed stronger at BRL2.271 to the dollar on the Brazilian Mercantile and Futures Exchange, or BM&F ...

Brazil's Real Closes Stronger In Slim Trading Session - FXStreet.com

TOKYO, Jan 5 (Reuters) - The dollar held firm near a three-week high against the yen on Monday as risk appetite grew after Tokyo shares followed Wall Street higher on hopes for a recovery in the U.S. economy later in the year. The Nikkei share ...

FOREX-Dollar holds firm near 3-week high vs yen - Forbes

Save 0.5 pip / $5 on each trade when trading at the best brokers. Gold Prices Are High! Send Your Jewelery We Send A Check In 24 Hrs. MoneyForex's vision is to service individual and corporate investors such as money managers, banks, and financial ...