What is Forex?

The Foreign Exchange market, is also referred to as the "FOREX" or "Forex" or "Retail forex" or "FX". Since 1999, Forex has been available to the retail traders. The Forex market is the world's largest financial market with an average volume of $3.2 trillion per day. If you compare that to the $50 billion traded daily by the New York Stock Exchange you can easily see how enormous Forex really is. (Source: Bank for International Settlements, September 2007)

Currencies trade in pairs, like the Euro-US Dollar (EUR/USD) or US Dollar / Japanese Yen (USD/JPY). Unlike stocks or futures, there's no centralized exchange for forex. All transactions happen via phone or electronic network.

Why Trade Foreign Exchange?

1.Highest Liquidity

The Forex market is the world's largest financial market with an average volume of $3.2 trillion per day. (Source: Bank for International Settlements, September 2007)

There is always buyer and seller in Forex market. The Forex market absorbs trading volumes and per trade size which dwarfs the capacity of any other market. On the simplest level, liquidity is a powerful attraction to any investor as it suggest the freedom to enter or exit the market at any time. Forex traders benefit from the ability to respond to breaking news immediately. There is no other market or investments that you can ever make an exit exactly at the time you wish to.

2.Profit on Bulls and Bears

"Buy low sell high", this is what every investor knows and practising in whatever market. One of the most exciting advantages of Forex trading is the ability to generate profits whether in the bull or bear condition. In the Forex market, apart form buy low sell high, Forex traders can always sell high and then buy back at lower price to generate profit.

3.High Leverage

In Forex trading, a small margin deposit can control a much larger total contract value. 400 to 1 leverage enable Forex traders to buy or sell $100,000 worth of currencies with $250 margin deposit. It gives Forex traders the ability to make extraordinary profit.

4.24 Hour Trading

The Forex market is open 24 hours daily. When Asia market is close, the European market start follows by the USA market and continue by Asia market again the next day. Thus, this allows Forex traders to take positions regardless of the hour and locations.

5.No Commissions or fees

Trading Forex has much lower transaction costs than other investment products, a very important point for active traders.