What is Foreign Exchange?
In our globalised economy, Foreign Exchange (Forex, or FX) has opened gateways for traders worldwide to make considerable profits from the fluctuations of currencies. The FX market is operational 24-hours a day, with trade starting in New Zealand and Australia, followed by Asia, Europe and London, and finally, New York.
Why invest in the FX market?
Forex is the largest financial market in the world due to the fact anyone can trade in the FX market with very little capital. It accounts for almost 3 trillion dollars in average daily turnover. As it is the only 24-hour market, no other trade offers greater potential for daily profit or loss.
FX traders deal in currencies and there are always two currencies involved in a trade, referred to as acurrency pair. The first currency is the base currency, which is quoted against a second currency, called the counter of quote currency. For example, the quotation EURUSD (EUR/USD) 1.5465 is the price of the € expressed in US dollars, meaning €1 = $1.5465.
For those new to FX, we recommend firstly trading with just one pair. For example, the EUR/USD market which is world’s biggest, most liquid currency pair and the highest volume traded pair.