The Forex Market - What Is Forex Trading?

The Forex Market - What Is Forex Trading?

The Forex market (or Foreign Exchange market) is the largest financial market in the world. Traders across the globe are buying, selling, or exchanging currency 24 hours a day with an average daily turnover in excess of 4 trillion USD.

The Foreign Exchange market is a dynamic global market comprising of investment management companies, commercial companies, banks, central banks, investors, hedge funds and retail Forex brokers. Trading commences on Sunday afternoon and closes on Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). With the ability to trade currencies 24 hours a day, traders are able to customize their own trading schedule, enabling them to get in or out of the market at any time.

In contrast to other financial markets, Forex market investors are able to respond to fluctuations in the market caused by political, social or economic events in real-time - day or night.

Unlike the stock exchange, transactions in foreign currencies are not centralized on an exchange. Instead, all transactions are carried out across the world via telecommunications. In virtually every time zone throughout the world, you will find dealers who will quote all of the major currencies. After an investor has decided which currency he/she would like to purchase, they will usually do so through one of these dealers (some of which can be found by searching online).

Risk

Whether trading in stocks or on the Forex market, there are always risks involved. As Forex trading is not executed on a standard regulated exchange, there are some additional risks involved In when trading currency.

Forex vs Stocks

Although stocks were traditionally viewed as an investment, due to instability over recent years, stock trading has taken a more speculative role. Many stock market traders now choose to trade in an alternative market - The Forex market. Rather than trading stocks of individual companies, these former stock traders are now exploring the benefits of trading currencies on the Forex market instead.

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