Forex is the term that is used to describe the trading in which currencies of many countries involved. This Forex market is the largest market in the world in which the turn over per day crosses USD 3 trillion. This Forex trading is conducted in the “interbank” market not by the central exchange. This Forex trading has the Over the Counter nature and it has large number of interconnected market where currencies of many countries are traded. This Forex trading has no single exchange rate rather it had several exchange rates. These exchange rates depend on the bank or marker involved and the place of trading.
London market is the main trading center but other centers in New York, Hong Kong, Singapore are also very important centers. This market is distributed throughout the world and so this market is shining as 24 hour market. In Forex trading there is no involvement of the third party and all the transactions in trading take place directly between two parties through the telephone or through the electronic networks like internet and emails all over the world.
Currency trading involves simultaneous buying of one currency and selling of another currency. This type of currency combination is called cross and the most commonly traded currencies are “majors”. Some of the majors are EURUSD, USDJPY, USDCEF and GBPUSD. Spot market is one of the most important Forex markets which have largest volume. This market is named as spot market because trades are settled immediately.
There are always buyers and sellers available in the Forex market for trade. This superior liquidity of the Forex trade is basically because of the liquidity provided by all the banks to the investors, companies and institutions. One of the attractive advantages of the Forex trading to the traders is that the feature of trading without any commissions. This is mainly because of the direct dealing made between two traders. It is cheaper to trade the majors than trading the cross because of the liquidity nature of the Forex trading.
This Forex trading provides the traders to gear up their investment to 100 times. This makes the traders to get more profit in this trading. This Forex trading makes you to leverage your first USD 25,000 to 100 times and for the remaining it is 50 times more than the normal one. This market is constantly moving and so there always you can found an opportunity to trade. No matter whether the currency is strengthening or weakening in relation to another currency. In this market it is easy to sell or buy the currencies. This helps to buy the currency which is weakening and to buy the one which is strengthening in a very simple manner.
