New to Forex?

What is forex trading?

The simplest definition of foreign exchange is the exchange of one currency for another. 

The foreign exchange market allows companies, banks and individuals to buy and sell foreign currencies. Unlike other financial markets, the foreign exchange market has no single location – trading is done globally via telephone and computer links. The Forex market is huge: the trading volume is in excess of 3 trillion USD per day, providing the greatest liquidity to investors.

Forex Trading is not conducted on a regulated exchange and as a result there are additional risks associated with this type of trading which should be considered before entering this market.

In the past small investors have had limited access to the lucrative forex market. The Interbank market is no longer the exclusive domain of large players. Technological leaps have opened up this exciting market to small speculators. Real-time Interbank dealing rates allow the trader to place a buy or sell order and see it executed within a fraction of a second. 

There are always buyers and sellers in the forex market. The market absorbs trading volumes. A trader is never stuck in a position due to lack of market interest, volume and/or liquidity.

How does Forex compare with other financial markets?

The Forex market is open 24 hours a day, 5.5 days a week. Because of the decentralized clearing of trades and overlap of major markets in Asia, London and the United States, the market remains open and liquid throughout the day and overnight. Most other markets are dictated by the time zones of their trading locations.

One 24-hour a day consistent margin rate allows Forex traders to leverage their capital more efficiently with as high as 100-to-one leverage. One must however consider that although high leverage is associated with high profits, higher losses could also be realized.

With a start up requirement of $2500 for a standard account and $250 for a mini account, Forex trading is much more accessible than other markets with high margin rates and huge capital requirements.

Please note that Forex Trading is not conducted on a regulated exchange and as a result there are additional risks associated with this type of trading which should be considered before entering this market.

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