The terms forex and fx are virtually household names today. They stand for foreign exchange market, the worldwide largest and most liquid over-the-counter financial market for currency trading.
The forex market is accessible 24 hours a day, and it operates through a global network of private entities, corporations and banks. Its nonstop operation offers you a unique opportunity: instant reaction to latest financial news.
Forex is the unique combination of trading, investing and exchanging currencies according to specific rates. With its huge trading volume, global presence, the low trading fees compared to other financial markets, and the use of leverage for profit margin increase make the forex market unparalleled.
Financial freedom and democracy play a major role in forex: no other investment opportunity is as versatile, open and accessible to everyone as the forex market.
There are no limitations to who can start trading it. Irrespective of skills, age, education or geographical location, forex is open to all those who want to grow their income and are ready to invest with the smallest amount possible.
Compared to other investment opportunities, forex tops the list. While keeping your money in savings accounts or in government bonds most often means a low annual return rate, forex investments are not limited in the returns they generate.
Profit is not fixed in advance – it is the direct result of how you trade and what deals you make. It is true that higher returns in forex involve a higher level of risk, but the relatively low risk for savings accounts and bonds most often do not compensate for the interest rate that sometimes barely goes above the inflation rate.
The flexibility in taking decisions, developing trading strategies, investing and profiting is priceless on the forex market.
While the worldwide stock markets can only be measured in billions, the forex market is 60 times bigger, boasting with a huge trading volume of $4 trillion a day.
Though national economies affect the forex market, in this respect it has another advantage over stock markets: as opposed to buying stocks, a forex investor can gain profit irrespective of currency fluctuations. Buying or selling currencies at the prevailing exchange rates is possible without restrictions to place or time – and with a single mouse click.
What makes the foreign exchange market very special is, among others, the fact that as opposed to other financial markets (for instance, the New York Stock Exchange) it is decentralized, that is, it has no physical location. Forex is run online 24 hours a day nonstop and within a network of banks. This is why we call it an OTC (over the counter), or interbank market. As a result, transactions can be done with a single click from any spot of the world and at anytime.
Its over 4 trillion daily turnover on average makes forex the largest and most active of all other financial markets on the globe, with a trading volume and size that keeps growing at an incredible speed. Thanks to its trading volume, the forex market has the highest liquidity: financial instruments are traded with great frequency and in big amounts from small individual investors to large corporate entities. Because it offers more opportunities to buy and sell financial instruments such as currencies and because it also reduces risk, high liquidity is a definite advantage in forex trading.
All the features of forex speak for themselves. First of all, in forex less is always more. As opposed to over 8,000 stocks listed on the NASDAQ and the New York Stock Exchange markets, in forex; traders only need to concentrate on six major currency pairs to make the most of trading.
Secondly, while for stocks the typical leverage is 2:1, forex trading allows investors to use increased leverage. On no other financial market is it possible to have an increased trading potential with this kind of leverage.
High liquidity is a definite plus, as well. With liquid securities like currencies, traders have instant access to money as they can sell their investment quickly and at the market prices most convenient for them. In addition to this, the possibility to trade round the clock is a great appeal: unlike in the stock market, which is only open during business hours, forex can be traded practically without a stop during the US, Asian and European market hours.
Forex traders have full control over their investment decisions and results. Since the forex market has no centralized exchange location, online access to the market is instant, trades are executed directly and at the current market price, without involving middle men. Last but not least, manipulative influence is absent: in forex there is no price monopoly, and as a result no price manipulation, either.
Risk Warning: Forex, Commodities, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you fully understand the risks involved and do not invest money you cannot afford to lose. Please refer to our full Risk Disclosure.