Almost all internet marketers have heard of forex trading. The term of forex trading is also known as FX, FOREX, and foreign exchange. All these names are related to the transaction of one currency for another, for example you might buy Euro with US dollar or you might sell Japanese Yen for Canadian dollar.
On forex trading, traders buy and sell currencies with the hope of making a profit when the value of the currencies changes (fluctuate) in their favour, whether from market news or events that takes place in the world. Basically buy low and sell high.
Forex trading has been around for years. It is become the biggest and the fastest growing market on earth. The estimated amount of daily volume is 1.5 trillion (
Unlike other financial markets, forex trading allows investors to respond to currency fluctuations caused by economic, social and political events instantaneously, at the time that events occur, day and night. The market only closes on weekends.
Forex trading is an over-the counter (OTC) market. This means buyers and sellers do not meet in central locations to make exchanges. Instead transactions are completed by phone, fax, and email or through the websites of brokers specializing in this market.
On forex trading, currencies are always traded in pairs. Transactions always involve selling one currency and buying another. If you believe the euros would gain against the dollar you would sell dollars and buy euros.
Leverage (ratio of investment to actual value)is forex advantage. Using $1000 to buy a forex contract with a value of $ 100,000 is “leveraging” at a 1:100 ratio. The $1000 is all we invest and all we risk, but the gains we can make may be many times greater.
How risky is forex trading? You cannot loose more than your initial investment (margin). You are strongly advised to never risk more than you can afford to loose
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