Easy Steps to Forex Trading

Beginners Guide to Forex

The Foreign Exchange market is also referred to as the "Forex" or "FX" market and is the largest financial market in the world, with a daily average turnover of more than US$1.5 trillion. Foreign Exchange is the simultaneous buying of one currency and selling of another. The world's currencies are on a floating exchange rate and are always traded in pairs, for example Euro/Dollar or Dollar/Yen.

FX trading is not centralized on an exchange, as are the stock and futures markets. The FX market is considered an Over the Counter (OTC) or 'Inter-bank' market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network.

The Forex market is called an Inter-bank market because it used to be dominated by the banks. This includes central banks, commercial banks, and investment banks. However, the percentage of other market participants is now rapidly growing, and includes large multinational corporations, global money managers, registered dealers, international money brokers, futures and options traders, and private speculators (also known as retail customers).

The Forex is a true 24-hour market. Trading begins each day first in Sydney, and then moves around the globe as the business day begins in each financial centre, first to Tokyo, then London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and geo-political events as they occur – by day or night.