A Short Introduction To FOREX

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FOREX is the world's largest and most liquid trading market. Many consider FOREX to be the best home business you can venture into. Even though ordinary people have had the opportunity to participate in for-profit foreign exchange trading (similar to banks and large corporations) since 1998, it is fast becoming the cool new 'trick'. , trendy and new to talk about at parties, business events, and other social gatherings.

Even though it has been a bit of a loosely kept secret, every day more and more investors are turning to the fully electronic world of FOREX trading for income and profit due to its many advantages over vehicles. traditional trading, such as stocks, bonds, and commodities.

But, still, whenever something seems new or just becomes part of social conversation, news articles, and water cooler gossip, the misconceptions need to be overcome, the ;mind

must be open and the slate must be clear to come away with the CORRECT information.

So in this article I'm trying to give you some solid, but not too detailed, information on what the heck "FX" (FOREX) means, what it is and why it exists.

As one successful trader once said, FOREX trading is like scooping money off the ground. Not trading FOREX, it's like leaving it there for someone else to take it. "Others in the industry

have also said, Trading FOREX is like having an ATM on your own computer.

Here is an explanation (which I think you'll enjoy) of what FOREX is and how a group of traders benefit from it:

The foreign exchange market, also known as the "FOREX" or "FX" market, is the spot (spot) market for currencies.

But don't confuse FX with futures market trading, where you buy a contract to buy a particular currency at a future price over time.

What FX traders do is much less risky than trading currencies on the futures market, much more profitable, and much easier than trading stocks.

So, you are probably wondering where it is … or … how to access the forex market?

The answer is: FX Trading is not tied to any trading floor, and is not centralized on an exchange, like the stock and futures markets. The forex market is considered an over-the-counter (OTC) or “ interbank '' market, due to the fact that the entire market is managed electronically, within a network of banks, continuously over a 24-hour period.

Yes, if this is the first time you've heard of a fully electronic marketplace, I know it might sound a little intriguing to you.

Here's what you actually trade when you participate in the forex market (FOREX):

Essentially, like the big banks that use the forex market to protect themselves against fluctuations in the exchange rate of different currencies, as an investor what an FX trader does is

simultaneously exchange the currency of one country for another. So in reality they electronically trade a currency pair and the price given to us is the exchange rate.

between the two currencies.

In other words, the price shown is simply how much of one currency is worth 1 of the other currency.

Example:

EUR / USD last transaction 1.2850 – One euro is worth 1.2850 USD. The first currency (in this example EURO) is referred to as the base currency and the second (/ USD) as the count or quote currency.

FOREX has a DAILY trading volume of around $ 1.5 trillion – 30 times the combined volume of all US stock markets. This means that 1,498,574 skilled traders could each withdraw $ 1 million from the FOREX market every day and the FOREX would still have more money than the New York Stock Exchange every day!

FOREX plays a vital role in the global economy and there will always be a huge need for FOREX. International trade increases as technology and communication increase. As long as there is international trade, there will be a FOREX market. The forex market has to exist for a country like Japan to be able to sell commodities to the United States and be able to receive Japanese Yen in exchange for US dollars.

There is a lot of money to be made using FOREX for many traders who use the right trading techniques / tactics that will allow them to profit tremendously. And, with only 5% of daily turnover in volume coming from banks, government, and large corporations needing to hedge, the remaining 95% is for speculation and profit.

(http://www.1-forex.com/)


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