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The ORIGINAL Forex Currency Exchange Review Site
Forex Currency Trading - What is Forex?
Forex is simply the term used to describe the Foreign Exchange market, where
people, businesses, and institutions around the world buy and sell various
currencies. Due to the evolution of computer and wireless technology, the average person can
now easily trade forex, 24 hours a day - 5 days a week. In it's simplest form,
forex (foreign
exchange) essentially involves purchasing a certain currency in the
belief that it will increase in value against another currency.
If you've been learning about the online global forex market (also known as the
FX market), you've probably
visited several forex sites and been overwhelmed by what seems like too much
information, and convoluted explanations of what forex is all about.
We experienced the same problem when starting forex trading years ago, and
decided to start this site to help beginning forex traders learn how forex works,
and hopefully gain enough knowledge to comfortably trade forex themselves from
home - and join in the excitement and money making potential of the world's
biggest marketplace.
Our goal is to provide a free site with helpful forex reviews - and
forex
information explained in a way that the average person can understand. Many
people are immediately turned off by forex because most forex websites make it
seem much more complicated than it really is. Trading forex online is as simple
as buying a stock online, except instead of buying a stock which you hope will
increase in value, you're buying a specified amount of a certain currency which
you believe will increase in value compared to other currencies.
Forex - Overview
Forex currency trading has rapidly gained in popularity around the globe in the past decade, as there are very
few barriers to entry for the small investor to participate. Before the
popularity of the internet, forex trading was almost exclusively done by banks
and large financial institutions. With the help of forex trading resources available online,
forex currency trading is now something that anyone can do to make money.
If you are new to forex currency trading, but not to stock investing, then this guide should help you to get a feel
for the differences between trading on the foreign exchange market versus trading on the traditional
stock market.
If you are new to investing in general, then this guide can open your eyes to a world you never knew existed.
The term 'forex' (or 'FX') is short for 'foreign exchange'. What is being exchanged on this market is not stocks or bonds,
but currencies from around the world. In other words, the forex market
is a worldwide marketplace where U.S. dollars, Euros, Yen, and other major currencies are bought and sold.
Forex represents the largest financial market in the world by volume. Daily
turnover in forex markets is almost 2 trillion dollars a day - about 30 times
the daily volume of the New York Stock Exchange. The simplest example of currency exchange that most
people are familiar with is that of exchanging one currency for another when traveling overseas.
Sometimes you get more for every dollar you exchange than other times. You will notice that foreign
exchange rates never remain the same and are constantly changing.
This volatility in exchange rates can enable you to make a lot of money in the
forex market with forex currency trading.
The aim in forex trading is to exchange one currency for another in the expectation that the currency you bought will increase in value
compared to the one that you sold. Currencies are traded through a forex broker and the currencies are always quoted in pairs, for example (EUR/USD).
In any 'currency pair' the base currency is the first one displayed and will be the one that is going up in value if the currency
pair is going up, and going down when the base currency is weakening.
The most widely traded currency pairs are known as the ‘majors’ due to their volume and liquidity in the market. They are (EUR/USD) (USD/JPY) (GBP/USD)
and (USD/CHF)
You will soon learn that it is normally cheaper to trade with these pairs. Currency that trades against the U.S. dollar is the
most popular because it is the most liquid and volatile. There are many different currency pairs to choose from
- however to be successful at forex currency trading, you only need to concentrate on the majors.
Forex Currency Exchange - Open 24 hours a
day.
In the forex market, currencies are exchanged through a floating exchange rate system. The
forex market has no central
exchange and has no trading floor. It is considered as an 'over-the-counter' (OTC) market and is run electronically within a
network of banks known as the interbank market. The FX market runs continuously 24 hours a day from Sunday afternoon to Friday afternoon.
In the past, the forex interbank market was not available to small investors. Due to recent advances in technology,
forex brokers have emerged to cater for the needs of almost any individual with the use of online
forex currency trading platforms.
The trading platform is the 'interface' where you will execute all of your trades with your broker with just a few clicks of the
mouse.
Individual traders like you and I are known as “Retail Traders”, and must go through retail brokerage firms in
order to buy and sell currencies on the foreign exchange market. Today, however, you can buy and sell currencies at
the click of a button, in much the same way as you buy and sell stocks. Everything has been automated and linked up electronically.
You should know up front that online retail trading by individuals (represented by online retail brokers) is still in its infancy.
Prior to the Internet, and subsequent availability of real-time market data, it was virtually impossible for the average person to
get involved in the foreign exchange market with any degree of success.
Unfortunately, there are unscrupulous companies out there who take advantage of this 'learning curve', and attempt to
scam would-be retail traders. Forex opportunity scams are still prevalent. Therefore, it is
important that you learn the basics of forex
before you get involved with any 'advanced' training courses, trading systems, or online
brokers.
Our goal is to provide honest and easy to understand information about forex,
and to help show the best and most reputable sites for the average person
interested in trading forex. We can't stress enough that you shouldn't be
intimidated by forex currency trading. Although it can look overwhelming with
many sites crowded with multiple graphs, charts, and complex looking reports -
forex is actually much simpler than it seems.
Trading forex is a fun and exciting way to make money from home - or wherever
you are - 24 hours a day. It's not a "get rich quick scheme" or
"easy money", but with some hard work and determination - you most
certainly can
become very successful at trading forex.
Next: Forex Review
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