What is Forex?
The Forex (foreign exchange) market is the largest financial market in the world with a daily volume of $5 trillion. It also serves as the primary exchange mechanism for global business and trade. With such a large daily transaction volume, the Forex market offers a wide variety of trading opportunities for people looking to capitalize on the fluctuations of currency values.
By understanding the participants of the market you will be in a better situation to appreciate why and how price may be affected by events. In doing so you will also gain confidence that there will always be buyers and sellers of currency, regardless of the price it is traded (unlike an individual stock...).
Forex traders commonly refer to the major currency pairs, as "The Majors". The majors are the most liquid and frequently traded currency pairs in the market, providing many opportunities for traders to speculate on market movements. Trade your favorite currency pairs today!
Timezones and Liquidity
With stocks, bonds, and most other financial products that are traded on various global exchanges, you can only make trades during the exchange’s business hours. Fortunately for Forex traders, currencies are free of this restriction and can be traded day or night—24 hours a day 5 days a week.
In the Forex market, traders hope to generate profits by speculating on the value of one currency compared to another. Currencies are always traded in pairs in many combinations offering opportunities to profit from exchange rates between various global currencies.
A full quotation is made up of 2 prices called the Bid and the Ask. The difference between these two prices is referred to as the 'Spread'.
A "pip" is the smallest whole increment in any Forex pair, which you need to understand to help you calculate the value of a potential trade.
Leverage and Margin
Margin and leverage are largely misunderstood – so make sure you know what these mean before you place a trade.