What is Forex
In its most simple definition, FOREX, FX, or Foreign Exchange, is the exchange of one country's currency for another. The term “FOREX” is short for Foreign Exchange.
The market for trading FOREX is open 24 hours a day, 5 days a week. FOREX traders speculate on the exchange rate between two currencies (currency pairs). By trading in this way clients are able to buy or sell one currency against another with the hope of making a profit when the value of the currencies changes in the favor of the opened position (whether it is buy / sell).
It is the simple primary aim and intention of trading to make profits from FOREX trading by placing buy or sell orders and take advantage of the fluctuations in prices of currencies traded during the course of the day. It is for this reason that FOREX trading is often referred to as day-trading. By monitoring market events and understanding the complexities of currency fluctuations allows traders the opportunity to make significant profit
in a very short space of time.
Currency markets can be volatile and so traders are always aware of the risks associated with investing. It is also very important to ensure a full understanding of the FOREX market and the processes and systems prior to making real money live trades. Most brokers offer a demo or practice account where new traders can practice trading strategies using virtual money though based upon live market prices.
A tool that has become more and more useful to both new and experienced traders is Forex Signals. A signal is when an alert to open a position is shared. Signals are an effective way to learn the market and take the opportunity to learn in real time from real traders.
History of Forex
Historically, currency trading was the exclusive activity of banks or large financial institutions with access to trading capital in the millions or more. This changed toward the end of the 1990’s when the opportunity to open currency investment to small and medium sized investors created the FOREX Market. A number of brokers quickly emerged to offer aggregated currency trading opportunities.
In essence this allowed brokers to combine the invested capital of its client base and trade as a large aggregated entity within the markets. FOREX brokers are effectively market makers enabling small, medium and Institutional clients the opportunity to join the currency trading action.
The FOREX market has a greater daily trading volume (both buyers and sellers) than any other financial market in the world. The industry has a reported volume of over $1.4 trillion changing hands between buyers and sellersacross the globe.
Over the years a number of trading platforms have emerged, with the most popular being MetaTrader. The majority of credible brokers offer this as their preferred platform to clients. More and more the established and experienced brokers are developing and launching custom platforms tailored to the needs of specific types of traders.
Trading platforms have evolved from complex desktop applications through to light web based products and more recently mobile applications allowing traders to access their portfolio and trade on their preferred platform allowing the maximum personal comfort in trading.
The introduction of Forex Signals providers has created an additional tool for traders. Often signals are delivered to a trader’s mailbox or phone via SMS, or in the case of ForexSignals the signals are provided in a dynamic and customizable live stream where members can review, discuss and copy a trade to their portfolio.