The forex or currency trading market is the largest and fastest growing market on the planet. In April 2010 the forex market was estimated to have a daily turnover of 3.98 billion dollars, however a report released last month (July 2011) by Dow Jones Newswire and reported here by the Wall Street Journal estimates daily forex trading volume to have grown to 4.71 billion dollars. All of this trading in currencies is being carried out by central banks, commercial banks, hedge funds, institutional investors and private investors and speculators like you and me. The forex marketplace is no different though from any other marketplace. It is a place where goods are bought and sold, in this case the goods being the currencies of various countries. Traders in forex are simply buying and selling currencies. Maybe they sell U.S. dollars to buy Yen or buy Euro with Australian dollars, but in the end it is simply trading one countries currency for another. And there is no need to actually physically hold the currencies so you can work with whatever your home currency is. For example, a U.S. based forex trader could open their forex account with U.S. dollars and then proceed to buy Euro to sell British Pounds. In addition to the aforementioned huge trading base and liquidity, one of the chief advantages of trading currencies is the large leverage you are able to use with forex contracts. Leverage is the ratio of your investment to the actual value of the [ Read More ]
Continue
