What is Forex?  If you've ever traveled to another country, you usually had to find a currency exchange booth at the airport, and then exchange the money you have in your wallet (if you're a dude) or purse (if you're a lady) or man purse (if you're a metrosexual) into the currency of the country you are visiting.  You go up to the counter and notice a screen displaying different exchange rates for different currencies. You find "Japanese yen" and think to yourself, "WOW! My one dollar is worth 100 yen?! And I have ten dollars! I'm going to be rich!!!" (This excitement ...

Trading Sessions Now that you know what forex is,why you should trade it,and who makes up the forex market,it's about time you learned when you can trade. Yes,it is true that the forex market is open 24 hours a day,but that doesn't mean it's always active the whole day. You can make money trading when the market moves up,and you can even make money when the market moves down. BUT you will have a very difficult time trying to make money when the market doesn't move at all. And believe us,there will be times when the market is as still as the victims of Medusa.This ...

How You Make Money in Forex In the forex market,you buy or sell currencies. Placing a trade in the foreign exchange market is simple:the mechanics of a trade are very similar to those found in other markets(like the stock market),so if you have any experience in trading,you should be able to pick it up pretty quickly. The object of forex trading is to exchange one currency for another in the expectation that the price will change,so that the currency you bought will increase in value compared to the one you sold.An exchange rate is simply the ratio of one currency valued against another ...

Market Players Now that you know the overall structure of the forex market,let's dive in a little deeper to find out who exactly these people in the ladder are.It is essential for you that you understand the nature of the spot forex market and who are the main players. Until the late 1990s,only the"big guys"could play this game.The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Forex was originally intended to be used by bankers and large institutions,and not by us "little guys." However,because of the rise of the internet,online forex ...

For the sake of comparison, let us first examine a market that you are probably very familiar with:the stock market.This is how the structure of the stock market looks like:By its very nature, the stock market tends to be very monopolistic.There is only one entity,one specialist that controls prices.All trades must go through this specialist.Because of this,prices can easily be altered to benefit the specialist,and not traders. How does this happen? In the stock market,the specialist is forced to fulfill the order of its clients. Now,let's say the number of sellers suddenly exceed the number of buyers.The specialist,which is forced to fulfill ...

Forex vs. Futures The forex market also boasts of a bunch of advantages over the futures market,similar to its advantages over stocks.But wait,there's more...So much more!Liquidity In the forex market,$4 trillion is traded daily,making it the largest and most liquid market in the world.This market can absorb trading volume and transaction sizes that dwarf the capacity of any other market.The futures market trades a puny $30 billion per day.Thirty billion? Peanuts! The futures markets can't compete with its relatively limited liquidity. The forex market is always liquid, meaning positions can be liquidated and stop orders executed with little or no slippage except in ...

Forex vs. Stocks There are approximately 4,500 stocks listed on the New York Stock exchange.Another 3,500 are listed on the NASDAQ.Which one will you trade?Got the time to stay on top of so many companies? In spot currency trading, there are dozens of currencies traded, but the majority of market players trade the four major pairs.Aren't four pairs much easier to keep an eye on than thousands of stocks?That's just one of the many advantages of the forex market over the stock markets.Here are a few more:24-Hour Market The forex market is a seamless 24-hour market.Most brokers are open from Sunday at 4:00 ...

Advantages of Forex There are many benefits and advantages of trading forex.Here are just a few reasons why so many people are choosing this market: No commissions No clearing fees, no exchange fees, no government fees, no brokerage fees.Most retail brokers are compensated for their services through something called the "bid-ask spread". No middlemen Spot currency trading eliminates the middlemen and allows you to trade directly with the market responsible for the pricing on a particular currency pair. No fixed lot size In the futures markets, lot or contract sizes are determined by the exchanges.A standard-size contract for silver futures is 5,000 ounces.In spot forex, you determine ...

Different Ways to Trade Forex Because forex is so awesome, traders came up with a number of different ways to invest or speculate in currencies. Among these, the most popular ones are forex spot, futures, options, and exchange-traded funds (or ETFs). Spot Market In the spot market, currencies are traded immediately or "on the spot," using the current market price. What's awesome about this market is its simplicity, liquidity, tight spreads, and round-the-clock operations.It's very easy to participate in this market since accounts can be opened with as little as a $25! (Not that we suggest you do. In the Capitalization lesson, you'll learn why!) Aside ...

Market Size and Liquidity Unlike other financial markets like the New York Stock Exchange, the forex spot market has neither a physical location nor a central exchange. The forex market is considered an Over-the-Counter (OTC), or "Interbank", market due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period. This means that the spot forex market is spread all over the globe with no central location. They can take place anywhere, even at the top of Mt. Fiji! The forex OTC market is by far the biggest and most popular financial market in the world, ...