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Foreign Exchange Market
How to Profit Trading Forex
Simple Forex Strategies
Collection of Forex Trading Strategies
 
 
 
 
 Foreign Exchange Market
 
The foreign exchange market (forex, FX, or currency market) is a form of exchange for the global decentralized trading of international currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.

The foreign exchange market assists international trade and investment by enabling currency conversion.

The foreign exchange market is unique because of
  • its huge trading volume representing the largest asset class in the world leading to high liquidity;     
  • its geographical dispersion;
  • its continuous operation;
  • the variety of factors that affect exchange rates;
  • the low margins of relative profit compared with other markets of fixed income; and
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  • the use of leverage to enhance profit and loss margins and with respect to account size.
As such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding currency intervention by central banks.

Being incompetent in FOREX can be expensive
Forex market is huge and plunging into trading without knowing its rules, will be equal to swimming in the pool with ocean sharks. The dominant Forex players such as banks and hedge funds have a power to influence market moves and currencies exchange rates. For inexperienced traders investing own money in such game is as risky and uncertain as gambling. It could turn into a million fortune only in a couple of weeks or become a disaster for those who was ignorant in learning.

Forex brokers offer very big leverage to individual investors. A trader can trade at huge leverage as much as 300 to 1, meaning that for every dollar trader puts in for trading he can trade $300. For example, having an account equal to $1,000 trader can trade as much as $300,000.

It is a huge opportunity, but it also is very dangerous. No experienced trader will ever trade with such big leverage unless he has a really strong argument for a particular trade, and even after that it is an enormous risk.     

Is trading FOREX profitable?
Trading in the Forex market is profitable, but only for 5% out of all beginner traders who start trading Forex. New traders need to learn the basics of trading well, and practice a lot on demo accounts before going real.     

Like in every business, when trading money in Forex, trader gets paid depending on his knowledge and trading experience.