Introduction to Forex

CFDs Trading, Forex, Foreign Currency Trading

The Forex (Foreign Exchange) Market is the largest market in the world. It is the market where currencies are traded. Each day, more than 5 trillion dollars are exchanged.

The Forex market is open 24 hours a day, so that you can be right there trading whenever you hear a financial scoop.

Unlike the stock market, a smaller market with an infinite amount of stocks to choose from, the Forex market revolves around more or less eight major currencies. A narrow choice means no room for confusion, so even though the market is huge, it’s quite easy to get a clear picture of what’s happening.

Its enormous daily trading volume makes it the world’s largest market, which means that under normal market conditions you can buy and sell currency as you wish. So if you think the Eurozone is going to collapse, you can sell the euro and purchase the dollar (sell EUR/USD). If you believe the price of gold will rise, and based on historical correlation patterns, you think the value of gold affects the value of the Australian dollar, you might decide to buy the Australian dollar and sell the U.S. dollar (buy AUD/USD). Additionally, this means that there really is no such thing as a “bear market,” in the traditional sense. You can make (or lose) money when the market is trending up or down.

Because the Forex market is so expansive no one can corner the market. Even the largest banks do not have enough pull to really control the market for a long period of time, which makes it a great place for anyone to make a move.

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