Forex Trading

The foreign exchange market, also known as the “Forex” or “FX” market, is the largest financial market in the world. The daily trading volume averages $1.9 trillion, which is more than 30 times the total volume of the U.S. stock exchange market.

Foreign exchange trading refers to the purchase of a currency at the same time as the sale of another currency, the transaction is always carried out in pairs. For example, the euro / U.S. dollar (EUR / USD), U.S. dollar / Japanese yen (USD / JPY).

There are two reasons for trading currencies. About 5% of the daily trading volume comes from companies and governments buying and selling goods and services in foreign markets because they have to convert the profits they earn into their own currency. The other 95% comes from foreign exchange trading for the purpose of investing winnings.

The best trading opportunities for speculators are in the major currencies. Today, more than 85% of the daily trading volume is in major currencies, including the US dollar, the Japanese yen, the euro, the British pound, the Swiss franc, the Canadian dollar and the Australian dollar.

The Forex market is truly a 24-hour market, starting daily in Sydney and moving around the world to Tokyo, London and New York. Unlike other financial markets, the Forex market allows you to respond to economic, social and political developments around the clock.

Unlike the stock and futures markets, the Forex market has no trading centers. The foreign exchange market is considered over-the-counter (OTC) or inter-bank trading, as buyers and sellers complete their transactions over the phone or through an electronic network.