Forex Trading

Forex or foreign exchange trading is characterized as the buying and selling of multiple currencies.

Most commonly, this is done to help turn a profit. Given oscillating values of currencies, especially floating currencies, the prices of two currencies relative to each other are always changing.

It is this constant volatility and price fluctuation of exchange rates that makes forex trading so popular.

Presently, the forex market is among the world’s largest and most liquid markets, with over $5 billion turnover every single day.

Moreover, markets are open 24 hours a day, 5 days a week, which differs from other asset classes.

The constant change in prices between multiple currencies also facilitates speculators or traders to invest in a certain currency against another.

By and large, the forex market serves as a very attractive market for many entities. This includes institutions such as banks and hedge funds, but also individual retail traders.

This is made possible presently by very low barriers for entry, which have helped grow the retail trading market over the past two decades.

Retail trading is extremely simplified currently, with most traders needing only a smart phone or computer with internet and deposited money at a forex brokerage.

Why Forex Trading is So Appealing

Forex trading can be traded by novices and experts. Some of the most successful investors have made fortunes trading forex, and unlike other assets such as equities, do not require things such as insider information to make large profits.

Forex trading however is historically quite difficult to become proficient in, given the large range of factors influencing different currency rates, as well as the behaviors of certain currencies.

For this reason, many retail brokers have dedicated large amounts of resources into educating their trading clients.

This includes webinars or tutorials, as well as practice trading via demo accounts and eventually on live accounts.