What is Forex ?

The Foreign Exchange market, also known as the Forex or FX market, was created in the early seventies as the international money markets evolved to a floating exchange rate system. Unlike other financial markets that operate in a centralised location via an exchange, Forex is simply a global network of central banks, financial institutions, corporations and individual traders all involved in the buying and selling of national currencies.

Another feature of the Forex market is that it operates 24 hours a day, 5 days a week from all the major financial centres of the world. Opening in Wellington, New Zealand and trading right through to New York via Sydney, Tokyo, Hong Kong and London. The extremely high volumes, estimated at US$ 4 trillion daily, deep liquidity and geographical dispersion characterises Forex as a market attractive to investors and speculators.

The foreign exchange or Forex Market exists wherever a currency is traded for another. It is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions.Trade in the global forex market is currently at over US$ 3 trillion daily.

Forex or foreign exchange trading is actually the largest and a fast-rising financial industry in stock trading these days. Here is a quick introduction to trading in foreign exchange.