Foreign Exchange Trading - FAQs
What exactly is Forex?
Forex is an acronym for Foreign Exchange and is the worldwide currency inter-bank or inter-dealer market that uses a floating exchange rate system. Most people have little knowledge of Forex. Yet, it is the world's largest financial market with an estimated daily average of more than $3 TRILLION. Some estimate that it would take the New York Stock Exchange about 2-3 months of trading to equal one day in Forex!
Foreign Exchange Trading, Forex, is the off exchange trading of retail foreign currency contracts not necessarily with a bank but most times through a registered Forex Dealer Member
How fair is the Forex market?
The Forex foreign exchange trading market is so large and is composed of so many participants that no one player, not even a large government, can completely control the long-term direction of the market. So, many experts have called Foreign exchange trading the "most level playing field" on earth.
Where is the central location of the Foreign exchange trading?
The word market is a bit misleading in describing Foreign exchange trading because for most currency instruments there is NO central location where foreign exchange trading takes place. The bulk of Forex or foreign exchange trading is between a few hundred large banks that process transactions for large companies and governments. These institutions continually provide exchange rates for each other and the broader market. The most recent quotation from one of these banks is considered the market's current pricing for that currency. Foreign exchange trading occurs over the internet, by telephone and through computer terminals at hundreds of locations around the globe. When does Foreign exchange trading occur? The first session, which is the Tokyo Session, begins each week on Monday morning in the Asia-Pacific region which is Sunday evening in the Americas . Trading continues non-stop moving into the London Session and on to the New York Session until all markets close on Friday afternoon.
What are the primary currencies in foreign exchange trading?
For most online foreign exchange trading brokers, there are four main currency pairs that are heavily traded and that offer almost immediate liquidity: Euro / US Dollar US Dollar / Japanese Yen British Pound / US Dollar US Dollar / Swiss Franc.
How often does a person have to trade?
The beauty of self-trading Forex is that a person can trade as occasionally or as often as they want. They can learn to trade longer-term strategies that may require checking the market as little as once or twice a week. Or, they can learn to trade shorter-term methods that may require watching the market a few hours a day.
How much money does it take to open a real money account to take part in foreign exchange trading?
A new student should first practice with a free demo-trading account where "pretend" money is used. When they feel ready to trade with real money, a "mini" account can be opened with as little as $300.00 USD.
Why is Foreign exchange trading so popular?
In our opinion, Forex foreign exchange trading is attractive because it offers great freedoms. A Forex trader can live almost anywhere as long as he/she is within reach of the internet. A Forex trader can work from home or office, and in some cases, even trade while traveling! A Forex trader can usually choose his/her own hours to work since the global foreign exchange market is open 24-hours a day. A Forex trader avoids many common headaches associated with running a business because there is NO inventory, NO shipping, NO billing, NO collections, NO employees, NO commuting and NO dress code.
Risk Warning