What is the Foreign Currency Trading Market?

The Foreign Currency Trading market, known also as Forex or Foreign Exchange market, is a trading market for simultaneously buying one currency and selling another.

Size of the Foreign Currency Trading Market

The Foreign Currency Trading market is the largest market in the world, with trades of over $1.95 trillion every day. This is more than three times of the total stocks and futures markets combined. Even though it is the biggest market in the world, its size is all virtual and it does not occupy any physical center. The Foreign Currency Trading market is run entirely through electronic means, and has no physical location, and so actual Foreign Currency Trading trading is done mainly through the internet.

All-Day Foreign Currency Trading

Currency Trading is in play all the time- this means people are trading foreign currencies 24 hours a day 7 days a week. Unlike the stock market, Foreign Currency takes place directly between the two sides that are necessary to make the trade. This is only one of the advantages of the Foreign Currency Trading market.

Real-Time Currency Trading

The online Foreign Currency Trading market is almost entirely a "spot" market. A "spot" market means that the trading is made immediately or "on the spot". The settlement of those Foreign Currency Trading spot transactions is made within two working days.

Major Foreign Currencies

The main currencies that are traded in FOREX are:

U.S. dollar (USD)
Euro dollar (EUR)
Japanese yen (JPY)
British pound sterling (GBP)
Swiss franc (CHF)
Canadian dollar (CAD)
Australian dollar (AUD).

Go back for checking current currency trading prices.

Online Foreign Currency Trading Strategy

Currency prices are determined by a variety of economical and political conditions, but probably the most important are interest rates, international trade, inflation and political stability. Foreign Currency traders analyze these statistics using two Foreign Currency Trading systems: technical analysis and fundamental analysis. One important aspect of currency trading is using the right measure to calculate your profits and losses. Without the right tools it will be harder to know the right currency choice to make at any given time.

Jeremy Evans - Editorial Staff