Are You New to Forex Trading?

This is an introduction to the Forex Market. also know as The Foreign Exchange market or the FX market. The Forex market is the largest financial market in the world, with a daily average turnover of $1.9 trillion US funds. This is roughly 30 times larger than the volume of all U.S. equity markets combined.

Foreign Exchange is the simultaneous buying of one currency and selling of another. There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. The other 95% is trading for profit, or speculation.

These currencies are traded in pairs. Two commonly traded pairs are Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen (USD/JPY). For speculators, the best trading opportunities are with the most commonly traded (and therefore most liquid) currencies, called "the Majors."

Today, more than 85% of all daily transactions involve trading of the Majors, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar.A true 24-hour market, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, London, and New York.

Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.The FX market is considered an Over The Counter (OTC) or 'interbank' market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network. Trading is not centralized on an exchange, as with the stock and futures markets.

Forex is traded much like any other financial instrument, using a combination of fundamental and technical analysis.If you'd like to learn how to become a successful forex trader, consider a professional forex training course.


Forex investors will need to understand the logic behind Forex trading. A succesful forex investor will need to:

• Recognize and capitalize on market trends
• Minimize risk and protect open positions
• Build a consistent and valuable portfolio
• React to major economic events impacting global currencies