With a daily average turnover of US$1.9 trillion that is the 30 times larger than the combined volume of all U.S. equity markets, the Foreign Exchange market, also referred to as the “Forex” or “FX” market is the largest financial market in the world.
“Foreign Exchange” is the simultaneous buying of one currency and selling of another. Currencies are traded in pairs, for example Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen (USD/JPY).
Many regular stock traders have never heard of the Forex market. This is because the Forex markets have only been open to public trading since 1995. Before 1995, only banks and large corporations traded on the Forex market to obtain the right amount of foreign currency they needed for a specific project.
There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. The other 95% is trading for profit, or speculation.
For speculators, the best trading opportunities are with the most commonly traded currencies, called “the Majors.” Today, more than 85% of all daily transactions involve trading of the Majors, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar, and Australian Dollar.
A true 24-hour market, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social, and political events at the time they occur – day or night.
The FX market is considered an Over The Counter (OTC) or ‘interbank’ market, because transactions are conducted between two counterparts over the telephone or via an electronic network. Trading is not centralized on an exchange, as with the stock and futures markets.
FOREX.com is a division of GAIN Capital Group. GAIN Capital Group is regulated by the Commodity Futures Trading Commission and is a member of the national Futures Association (NFA). As a registered Futures Commission Merchant (NFA ID #0339826), GAIN must uphold the highest standards and business practices and is subject to strict financial requirements and reporting.
All FCMs must adhere to strict rules and regulations to protect customer funds, including Minimum Net Capital requirements based on customer’s open positions. GAIN submits to the CFTC and the NFA financial data on a weekly and monthly basis.
Finally, GAIN holds supplemental insurance policies to protect customer funds further against failure of service, dishonesty, forgery, alteration etc. A Financial Institution Bond is held through the National Union Fire Insurance Company and the Bankers Professional Liability policy is held through Lexington Insurance Company (both member companies of American International Group).
FOREX.com’s dealing software provides each client with a wide range of trading tools, including technical analysis and charting, real-time news feeds, real-time profit and loss analysis, and full back office capabilities.
FOREX.com’s market professionals will also provide daily FX commentary. Finally, account statements are sent at the beginning of each month, and list all transactions for the previous month by currency and value date, a summary of all current open positions, and account balance as calculated at the close of business on the last business day of the month.
When you do take part in Forex online currency trading, your trades are executed almost instantaneously; in fact, on average, the trades are executed in less than a second therefore giving you the ultimate high-speed transaction service.
There are 15 different currencies that you can trade in when buying and selling on the Forex market; and that means that you have a lot of different options and subsequently even more potential strategies.
And as the Forex market gets older (it has only been available to the public since 1995), it is highly likely that the amount of currencies available will grow. Expanding options available to traders will also expand the amount of people who trade-and thus the ease with which you will be able to execute a trade.
If you are going to trade on the Forex market, then you should make sure you are in good hands. There are a number of Forex companies that will give you up to the minute news on the latest currency updates and you will always know what is happening.
Forex trading is very different from trading in stocks and using forex trading strategies will give you more advantages and help you realize even greater profits in the short term. There are wide ranges of forex trading strategies available to investors and one of the most useful of these forex trading strategies is a strategy known as leverage.
This forex trading strategy is designed to allow online currency traders to avail of more funds than are deposited and by using this forex trading strategy you can maximize the forex trading benefits.
Using this strategy you can actually utilize as much as 100 times the amount in your deposit account against any forex trade which will make backing higher yielding transactions even easier and therefore allowing better results in your forex trading
The leverage forex trading strategy is used on a regular basis and allows investors to take advantage of short term fluctuations in the forex market.
Another commonly used forex trading strategy is known as the stop loss order. This forex trading strategy is used to protect investors and it creates a predetermined point at which the investor will not trade.
Using this forex trading strategy allows investors to minimize losses. This strategy can however, backfire and the investor can run the risk of stopping their forex trading which could actually go higher and it really is up to the individual trader to choose whether or not to use this forex trading strategy.