What is the Foreign Exchange (FOREX) (Currency Trading) market?The Foreign

What is the Foreign Exchange (FOREX) market?

The Foreign Exchange market, also referred to as the spot “FOREX” market, is the largest financial market in the world, with a daily average turnover of approximately $1.5 trillion USD. Foreign Exchange is the simultaneous buying of one currency and selling of another. Most FOREX trading consists of trades between the U.S. dollar and six major world currencies…Australian Dollar (AUD), Great British Pound (GBP), Canadian Dollar (CAD), Japanese Yen (JPY), and Swiss Franc (CHF).

Why have I never heard of the FOREX market?

Many Americans have not; yet, the FOREX has been actively traded by banks and financial institutions for nearly 30 years. In 2000, the U.S. Congress passed the Commodity Futures Modernization Act which made trade the FOREX possible for the average U.S. investor.

How does the FOREX market differ from the stock market?

The FOREX is one of the fastest growing markets in the world because it offers the average investor leverage unlike most any market, up to 100:1. Since the FOREX is traded globally through a network of banks and financial institutions 24-hours a day from Sunday at 5pm (Eastern Time) through Friday at 4pm (Eastern Time), there is no central exchange. Traders and investors can trade the FOREX most anytime that it is convenient for them.

What makes the FOREX market move?

World currencies are exchanged in large because of international trade. For instance, consumers of one country purchase goods of another country. Also, when large companies do business with other global companies. Global investments and monetary diversification are additional reasons that make the FOREX market move.

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