| The Forex markets are the international markets for | | | | may for example, be reading this article as one of |
| the buying and selling of global currencies. Also known | | | | the many traditional equity investors who are now |
| as the Foreign Exchange markets they are the | | | | turning to Forex trading as part of their portfolio. |
| largest and most liquid financial markets in the world | | | | Retail Forex traders now make up an increasingly |
| with a turnover in excess of $4 trillion dollars per day. | | | | large portion of the market using speculation on |
| This is more than three times the amount traded on | | | | currency movements in much the same way that a |
| the all the global stock markets combined. | | | | stock trader would speculate on future share price |
| What Is Traded On The Forex markets? | | | | movements. |
| The simple answer is money. Or more specifically | | | | Different trading strategies are employed by traders |
| international currencies. The act of Forex trading | | | | who may use both short and longer term |
| represents the simultaneous buying of one currency | | | | movements in currencies in an attempt to profit. |
| and the selling of another. | | | | Who can trade Forex? |
| Foreign Currencies are bought and sold through a | | | | The Forex markets tend to be dominated by big |
| Forex broker or dealer. | | | | players such as Central and Commercial banks, |
| On the Forex market currencies are quoted against | | | | investment companies and increasingly Hedge Funds. |
| each other. The first currency is the base currency. | | | | However the Forex markets are available to anyone |
| This is in effect the currency that you buying. The | | | | to participate in. |
| second currency is the currency you are in effect | | | | As competition for retail customers has increased |
| selling. For example, you can exchange the British | | | | among Forex brokers, so to have account opening |
| Pound for the US Dollar (GBP/USD) or the Euro for | | | | requirements. You can now trade on the Forex |
| the US Dollar (EUR/USD). | | | | markets with low deposit accounts, often from as |
| Why are Currencies traded? | | | | little as $100 and sophisticated online trading |
| Currency trading has been practiced throughout | | | | platforms. |
| history. The primary purpose was to facilitate trade | | | | Which Currencies Are Traded? |
| between geographic regions and to accommodate | | | | The most popular currency pairs traded on the Forex |
| regional. | | | | market are the known as the majors EUR/USD, USD |
| Increasingly however, the trading of currencies has | | | | JPY, GBP/USD, USD/CHF and the commodity pairs |
| been used for both speculation and investment | | | | USD/CAD, AUD/USD, NZD/USD. |
| purposes. | | | | Other more exotic currencies can be traded, but in |
| The rise of the internet and the ability to easily trade | | | | much smaller amounts. Among these smaller |
| online has seen a rapid rise in the number of retail | | | | currencies are the Hong Kong Dollar (HKD), Polish |
| investors who are drawn to this way of trading. You | | | | Zloty (POL) and the South African Rand (ZAR). |