An Overview Of Forex Trading

The foreign exchange market is an interesting place; huge amounts of cash flow in and out

, and the bean counters run by the moment. Foreign currencies are simultaneously bought and sold across the globe, and fortunes rise and fall with the vicissitudes of currency price changes. Forex trading is extremely dynamic, with innumerable variables determining market conditions.

The major participants in the forex market have traditionally been institutional investors, commercial banks, central banks, hedge funds and other financial corporations. Consider that in 1986, Caterpillar actually covered up its operating losses with a $100 million profit from forex trading. In Q2 of FY 2003, 50% of Daimler Chrysler's operating profit came from forex trades, which amounted to more than profits from selling cars! In FY 2002, Bank of America declared a $530 million profit under the 'Global Investment Income' head.

Forex trading has been growing increasingly popular among the masses in recent years. As a potentially lucrative investment option, forex trading also offers a number of advantages. Here are a few of the foremost reasons for private investors to favor forex trading over other investment avenues.

The foreign exchange markets do business around the clock. Being an inextricable part of the global economy, the forex market operates across time zones. This means that traders have access to money making potential 24x7.

The forex market is in fact, the biggest market globally. With a daily turnover exceeding 2.5 trillion dollars, it offers exceptional liquidity, enabling traders to trade most currencies round the clock without dearth for buyers or sellers given the sheer number of participants the forex industry involves.

Further, forex trading offers the potential for profits regardless of whether the markets are rising or falling. Investors with an aggressive risk appetite can also operate on leveraged trading with low margin requirements. As a market with inherent standard instruments to control risk exposure, and with a fair degree of regulation (although not as much as, say, equity markets), the foreign exchange market has proved to be a potential cornucopia to traders hunting for their fortunes.

by: Samuel

POST COMMENT

Devising A Sound Forex Trading Strategy The Best Forex Expert Advisor - The Turtle Robot - 3 Clear Advantages It Has Over Its Rivals Forex Trading Made Simple - A Simple 4 Step Guide To Forex Success Forex Trading Robot - Millions In Real Time Trading And Based On Easy To Understand Logic! This Amazing Beats Faptrubo By A Mile Forex Megadroid A Quick Look At Currency Trading For Newbies Top Forex Robots Reviews, The Best Of Today What To Know To Start Making Real Money Forex Trading No Matter Who You Are Steering Clear Of Unethical Providers Of Forex Signals How To Make The Forex Trading Platform Work For You Secrets Of Forex Trading Strategies Revealed Why You Need The Best Forex Robot Free Forex Trading