What is Forex?

FOREX — the foreign exchange market or currency market or Forex is the market where one currency is traded for another. It is one of the largest markets in the world.

Some of the participants in this market are simply seeking to exchange a foreign currency for their own, like multinational corporations which must pay wages and other expenses in different nations than they sell products in. However, a large part of the market is made up of currency traders, who speculate on movements in exchange rates, much like others would speculate on movements of stock prices. Currency traders try to take advantage of even small fluctuations in exchange rates.

In the foreign exchange market there is little or no 'inside information'. Exchange rate fluctuations are usually caused by actual monetary flows as well as anticipations on global macroeconomic conditions. Significant news is released publicly so, at least in theory, everyone in the world receives the same news at the same time.

Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar.

Unlike stocks and futures exchange, foreign exchange is indeed an interbank, over-the-counter (OTC) market which means there is no single universal exchange for specific currency pair. The foreign exchange market operates 24 hours per day throughout the week between individuals with Forex brokers, brokers with banks, and banks with banks. If the European session is ended the Asian session or US session will start, so all world currencies can be continually in trade. Traders can react to news when it breaks, rather than waiting for the market to open, as is the case with most other markets.

Average daily international foreign exchange trading volume was $4.0 trillion in April 2010 according to the BIS triennial report.

Like any market there is a bid/offer spread (difference between buying price and selling price). On major currency crosses, the difference between the price at which a market maker will sell ("ask", or "offer") to a wholesale customer and the price at which the same market-maker will buy ("bid") from the same wholesale customer is minimal, usually only 1 or 2 pips. In the EUR/USD price of 1.4238 a pip would be the '8' at the end. So the bid/ask quote of EUR/USD might be 1.4238/1.4239.

This, of course, does not apply to retail customers. Most individual currency speculators will trade using a broker which will typically have a spread marked up to say 3-20 pips (so in our example 1.4237/1.4239 or 1.423/1.425). The broker will give their clients often huge amounts of margin, thereby facilitating clients spending more money on the bid/ask spread. The brokers are not regulated by the U.S. Securities and Exchange Commission (since they do not sell securities), so they are not bound by the same margin limits as stock brokerages. They do not typically charge margin interest, however since currency trades must be settled in 2 days, they will "resettle" open positions (again collecting the bid/ask spread).

Individual currency speculators can work during the day and trade in the evenings, taking advantage of the market's 24 hours long trading day.

Why Forex

So what exactly is the forex, you ask?
 
It's a market; it is that simple.

    More precisely, FOREX is a currency trading market, and it is one of the largest and most rapidly developing markets on the planet. Over 2.5 trillion dollars are turned over on the forex every single day. That is more than 100 times the amount turned over daily on the NASDAQ. If you are intrigued, you can click here and get more detailed market information from Forex4you.

    So, what is a market? Simple: it's a place where goods are traded. The forex is no different, but with one little twist: the goods traded on the forex are national currencies. For example, on the forex you might pay in American dollars and buy some Canadian dollars. Or, you could sell your euros for Japanese yen. There is nothing more to it than that.
How do I make a profit using the forex?

    Again, the answer is obvious: just as with any market, you make money by buying low and selling high! Buy for less, sell for more! All you do is take advantages of fluctuations in the relative values of world currencies. Each currency's value changes every day in the currency exchange market. All you have to do is use these fluctuations to your advantage.

    One thing we'd like to mention about currency exchange on the forex.  These daily fluctuations are actually 100 times greater than the actual fluctuation (for example, around 1%). Generally speaking, Forex4you can offer trading ratios of between 1:10, 1:100, 1:200 and 1:500. So let's do the math: if the exchange rate of your given pair of currencies increased by just 0.6% over the last few hours, then you'll bag a profit of 60% on your original investment! All of this can happen over the course of a single business day, or as quickly as a matter of minutes.

    And best of all, you don't risk losing anything more than your margin! There's absolutely no limit to your possible profits, but you never risk losing anything beyond what you originally invested.

    And another thing: you have the power to choose your pair of currencies, and their amount, based on which way the market's headed, and still turn a profit. It makes no difference which way the exchange rate is headed, down or up, because you always have the choice of buying US dollars and selling Yen, or the other way around - buy Yen and sell US dollars. And no, you don't need to actually own any particular currencies, or "have" them in hand, in order to make transactions with them on the forex (to buy them or sell them).
So, how do I get started?

    You simply register with Forex4you! We offer the easiest and fastest registration online, with absolutely no obligations. Once you're registered, just make a deposit of the margin amount you choose to begin trading with, and you can start. And only Forex4you allows you to make your deposit with your credit card and start trading in 2 minutes.

    It just doesn't get any simpler. But if you do need assistance, we offer as much customer service and one-on-one training as you need. And in case Forex4you your assistance won't come from a computer, but from a living, breathing human being, who speaks your language.
How do I trade on the forex?

    For starters, you simply choose which two currencies you want to make a deal with on the forex. You choose the amount of the deal you'd like to make (called the "volume"). You make a deposit to provide the collateral needed for the deal, called the "margin." In most cases, this is just a fraction of the overall amount of the deal, for example, 1%, or 1:100.

    You still have the power to "freeze" the deal for several seconds before you finalize it. Freezing allows you to adjust the terms or to accept them as they are. Or, you can call the whole thing off, and cancel the deal. Freezing is a feature offered exclusively by Forex4you. While your deal is still running, you have a so-called "open position." This means that you're able to follow your deal's status and scenarios online at any time. You can make changes to the deal's terms, or you can simply cancel it and either pocket any profits, or minimize any losses. What's more, Forex4you allows you to set a "take-profit" rate. When and if the market reaches this rate, your deal will close automatically, allowing you to be away from your computer while you have an "open position."

   Ready to learn more, or find additional training online. Just register with us, with no obligation, and we will lead you through the process step-by-step.

What is Forex?

Abbr. "FOREX" stands for Foreign Exchange, an exchange of currencies. When a person comes to trade currencies, e.g. buy one currency and sell another one - it is called currency exchange trading, or simply known as Forex.

Because the value of each currency always on the move, it fluctuates depending on the local and global economic factors, there is always an opportunity to profit on those changes/fluctuations - it is called currency speculation.


Euro, US dollar, Swiss Frank, British Pound and Japanese Yen - these are the most traded currencies in Forex. Of course, trading is not limited to those currencies, Forex offers variety of currencies one can trade.

If to describe in simple words how individuals trade Forex it would look next way:

Forex trading in its prevailing volume is done online.
A person finds a Forex broker, opens a trading account with the broker and deposits money.
Forex broker provides to trader so called Forex trading platform - an application, a working environment, where trader buys and sells currencies, dealing online - in other words he speculates to make money on the difference of currency rates.

In Forex currencies are traded in pairs.

EUR/USD, GBP/USD, AUD/JPY, USD/CHF and so on.
FOREX

The first currency in the exchange pair is referred to as the base currency and the second as the quote currency.
For example, EUR/USD exchange rate = 1.400
Here the price of the Euro is expressed in US dollars: 1 euro = 1.400 dollars
The exchange rate tells to trader how much of the quote currency should be paid to obtain one unit of the base currency.


A Quick Overview of FOREX


FOREX is a spot market, where foreign currencies are traded - bought and sold for profit.

FOREX is a worldwide currency speculation arena with no centralized place for trading and exchange.

FOREX is a huge market with trillions dollars turnover a day and the largest investors - banks, hedge funds, investment companies and so on.

FOREX is open to individual retail investors - Forex traders - through the services of Forex brokerage companies that provide an access to the currency exchange market and take care of buying and selling orders of their clients.

FOREX is a 24 hour market that is traded every day all year round, except for holidays.

FOREX allows trading over 150 foreign currency pairs, among which the most traded are: EURUSD, GBPUSD, USDJPY, AUDUSD, USDCHF, USDCAD and GBPJPY.

FOREX trading is based on technical (price charts) and fundamental (news, economic events) analysis.

FOREX is an online stay-at-home type of business for individual investors.

FOREX is an attractive financial instrument, which can be mastered by any person with any kind of education and/or social status.

FOREX is a type of market which nowadays can also be traded by automated online expert advisors without any human intervention.

FOREX is an alternative type of investment, which unlike any other investment carries one of the largest financial risks.

FOREX is a trading arena, where in order to succeed a trader needs to learn the rules of the market, its trends, moves and behavior, and be able to apply the knowledge under real trading conditions.

FOREX is difficult to trade without a trading method - a trading strategy or system.

FOREX is a fast growing industry, and by directly dealing with money it also became
a lucrative business to various scam dealers. Novice traders should be alert about any offers in Forex which sound too good to be true.

Finally, FOREX should never be associated with quick and easy money.

Learn All About FOREX

The foreign exchange market or better known as FOREX is when one currency is traded for another country’s currency. It is an alternative form of business where the goods to be bought and sold are money itself using money.

In the past, people would normally engage in stocks and pool their savings in the money market to build up their investment portfolio. 

Nowadays, with more than 1.5 trillion USD of FOREX being exchanged on a daily basis, even the “small-time” investor can participate in the FOREX market. There is leverage in the FOREX market where a minimum amount of currency can have access to a large deal of money. 

A lot more advantages to study and dive into FOREX trading include the following: 

Why FOREX?

 

24-hour trading

Compared to stocks, FOREX trading is twenty-fours. A FOREX trader can trade right away once they spot an opportunity to buy low and sell high. Remember, money has time value. And a lot of factors in the economics and politics of a government affect how low a currency will drop or how high a currency will gain. It is fairly easy to say buy low and sell high. But the trick is to know when to do it. With twenty-four trading, the FOREX trader has the ultimate advantage already. Since, after all, time is money. 

High liquidity

A market or business is considered very liquid if the assets involved can enable the person to directly meet his payment obligations. In other words, if cash is at hand—immediately. What is a more liquid market than the FOREX market?

FOREX has high liquidity, because it can be traded swiftly, without considerable loss of value, and anytime within the trading hours or in FOREX trading’s case—24/7.

No commission

FOREX trading need not have brokers in between to facilitate. With other forms of money market ventures and stock trading, brokers come in handy; because they are able to handle varied forms of portfolios and company stocks for the investor. Even if FOREX trading is involved with multiple currencies, it is a very direct business where the trader himself can act on his own; thus no commissions are leaked out and all profits are kept!

Steady market availability

In all businesses, businessmen strive for a steady market, if not an increasing one. Why spend time in a trading scene when it is short-term?

Because FOREX trading is all about the buying and selling of currencies, it is a continuously moving market. Money make the world go round, as the cliché goes. 

The market will always be there. The trader only has to be aware of the rising and falling of the currencies. When is the currency starting to be weak? When is it going strong? Is there a trend?

Taking action

This benefits and advantages all the more make FOREX trading a very attractive business venture. For first time FOREX traders, why not inquire now at your home bank on how to start making your money work for you? FOREX trading is the way to go.