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What is Forex?
from: Francis GillenIf you read about investing, you've seen the word forex pop up.
But because forex doesn't get much publicity in the major
publications and websites, many investors don't know that forex
is just short for "foreign exchange." So trading the forex
market is simply trading foreign currencies. As recently as ten
years ago, currency trading had high barriers to entry, so only
large banking and institutional firms had access to the tools
and systems required to play in the forex game. Recently,
however, technology has developed to the point that any
individual investor can hop right in and trade with one of the
many online platforms.
When buying and selling in the forex market, you'll see that
there are four "currency pairs" that dominate the percentage of
trades. Those four are the Euro vs U.S. Dollar, US Dollar vs
Japanese Yen, US Dollar vs Swiss Franc, and US Dollar vs British
Pound.
The goal when investing in currency is to be holding a currency
that appreciates in value in relation to the other currencies.
To use an overly simplistic example, if you bought 50 British
Pounds for 100 US Dollars, held the Pounds for 1 week, and in
that period the value of Pounds increased in relation to US
Dollars, you could then convert those Pounds back into dollars
for, say, $120.
Unlike the domestic stock markets, the forex is open for trades
24 hours a day. Much like the phrase "it's always noon
somewhere," it's always business hours at some region of the
globe. Since every country trades on the FX market, and it's
open all day, the daily volume is roughly $1.2 trillion, which
dwarfs that of the NYSE. Another comparison to make in order to
truly realize the magnitude of the forex market is with the
currency futures market (which has around 1% of the daily
volume).
One other important distinction to make is that currency trading
is not centered on an exchange like the NYSE or NASDAQ. There is
no central body or organization required to act as middleman.
Trading circulates between major banking centers around the
world.
Until recently, there were strict financial requirements and
massive minimum transaction sizes which prevented individual
investors from trading. But with the advent of the internet came
the FX brokers. A forex broker is similar to an online stock
trading account such as etrade. Anybody can open an account and
buy and sell in any quantity. Because the brokers have thousands
of investors placing orders through them, they are able to meet
the large minimum transaction size by purchasing in large blocks
and distributing currency amongst the purchasing investors.
Although it is now easy to start trading forex, it is a
complicated and complex market. While it offers fantastic
opportunity for wealth, it is also very easy to lose your shirt
in a hurry. Before trading forex, do your homework and read as
much as you can find before investing your hard earned money.
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Forex News
FOREX-Yen hovers near 15-year peak vs dollar; euro falls - FOXBusiness
 Telegraph.co.uk | FOREX-Yen hovers near 15-year peak vs dollar; euro falls FOXBusiness Japanese Finance Minister Yoshihiko Noda said his ministrywas conducting simulations on forex intervention. But hiscomments were somewhat undermined after ... FOREX-Yen near 15-yr high vs dlr; euro hurt by bank woes WORLD FOREX: Japan Warnings Manage To Hold Back Soaring Yen FOREX-Yen remains near 15-yr high vs dollar |
WORLD FOREX: Growth-Oriented Currencies Up On Positive US Data - Wall Street Journal
WORLD FOREX: Growth-Oriented Currencies Up On Positive US Data Wall Street Journal NEW YORK (Dow Jones)-- The Australian and Canadian dollars rose against the US currency on Thursday after ... WORLD FOREX:Euro Gains Modestly Vs Dollar On Bond Sale,US Data IB FX Brief - Mixed bag for forex traders Ldn FX: Portugal Bond Auction Gives Euro Temporary Respite |
CitiFX Pro to Sponsor First-Ever Industry-wide Survey of Forex Traders - MarketWatch (press release)
CitiFX Pro to Sponsor First-Ever Industry-wide Survey of Forex Traders MarketWatch (press release) LONDON, Sep 09, 2010 (BUSINESS WIRE) -- CitiFX Pro, Citi's online forex trading platform for active individual and small institutional clients, ... |
Forex settlement volumes edge down in August - CLS - Reuters
Forex settlement volumes edge down in August - CLS Reuters LONDON, Sept 9 (Reuters) - The average number of daily foreign exchange payment instructions edged down in August from the previous month after hitting a ... |
Forex swaps with ECB total $60 million - NY Fed - Reuters
Forex swaps with ECB total $60 million - NY Fed Reuters NEW YORK, Sept 9 (Reuters) - The Federal Reserve provided $60 million of liquidity to foreign central banks in the latest week, the New York Fed said on ... |
USDSGD direction - Forexrazor
USDSGD direction Forexrazor High-Risk Warning Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work ... |
Forex: EUR/AUD extends record low to 1.3713 - NASDAQ
 Corporate FX | Forex: EUR/AUD extends record low to 1.3713 NASDAQ FXstreet.com (Barcelona) - The Australian Dollar gave no chance of recovery to the European common currency on Thursday, and extended its rally to post a ... Forex: AUD/USD retreats from 0.9275, fresh 4-month high Forex: AUD/USD trading at 4-month highs above 0.9220 Forex: EUR/AUD hits fresh all time low below 1.3800 after job report |