Forex (or FX) refers to the foreign exchange markets, where currencies are traded.
It is the biggest and fastest growing financial market in the world, with an average
daily turnover of almost $2 trillion – many times the total traded volume of the US
stock exchanges.
The forex market consists of a worldwide wired network of buyers and sellers of
currencies, with trading all done over-the-counter (OTC), which means that there
is no central exchange and clearinghouse where orders are matched. If you are
looking for 24-hour action, you can find it in this global trading system, where no
physical barriers exist and activity moves seamlessly from one major financial
centre to another.
A reason why there is a veil of mystery over forex is that the market was once the
exclusive playground of banks, hedge funds, corporations and financial institutions,
where money changed hands for commercial and speculative purposes. However,
forex has now expanded and is easily accessible to all traders with the rapid
emergence of online currency trading platforms. Many of these platforms are wellequipped
with free charting software, real-time news-feeds and easy-to-use order
placing systems.
The wide availability of sophisticated technology has spawned a whole new level
of foreign exchange, where self-directed (so-called “retail”) traders can easily buy
and sell currencies through an internet connection with a click of the mouse,
dealing with invisible counter-parties on the other side of the transaction. This
group of people (also known as speculative traders) engage in trading forex for the
sole purpose of making profits.
Anyone can trade forex, but not every one can be profitable. That’s the rule of any
game – not every one can win.
