Introduction to the Forex Market

The foreign exchange market also known as Forex is a market where governments, banks, corporations, companies and people worldwide trade with foreign currencies.

If I would have told almost any person 15 years ago a, that the USD (US Dollar) will gain value against the GBP (Great British Pound) in the next week. This person will have probably take a walk to the bank or to a local money exchange or Money shop and would have asked to purchase USD with his GBP in order to sell it back again in a week. In the end of this process that person would have had more GBP than in the beginning.

Forex is the largest financial market in the world. The market is open 24 hours a day and is traded in volumes of more than $3 trillion per day. Because of that and due to the nature of this market it is almost impossible for any person, institution or government to control it.

Due to the very large trading volume the forex market is the most liquid market in the world.

In the past the forex market was an Inter Bank market and was conducted between large financial corporations, brokers and governments.  Today anyone can participate in the forex market due to many companies that provides trading platforms and services.

Most forex companies provides their traders with a leverage of between 1:1 to 1:400 that means that if a trader will deposit 1 USD he will be able to trade with 400 USD. The leverage allows the trader- to trade with large amounts even if he does not have them, in order to profit from the changes in the market even with a considerably small amount of money.

In the forex market all trades will be carried out immediately.

 

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