What is The Forex Market (FX, Foreign Exchange)
The Forex Market (FX, Foreign Exchange, 4X) FX, Forex, Foreign Exchange and 4X are all abbreviations of the same thing – the Foreign Exchange Market.
Not so long ago, the Forex market was considered to be the private domain of the international banks, money changes, governments, large institutions and very wealthy private individuals. In order to trade within the FX market one had to overcome large financial hurdles such as very large deposits (usually $100,000 and up) and large minimum trade sizes (usually $250,000 and up), along with many other constraints.
With the introduction of the internet, all that has changed.
Today people from all over the world are able to access the Forex market through Online Brokers easily with initial deposits of $100!
Today there are only three requirements necessary to enter the Forex market:
- A computer and internet access – if you are reading this webpage you must have filled these criteria.
- The basic knowledge of the FX market and how to trade – this is where we come in, after reading through our pages, you should gain more then the basic education needed to trade.
- $100 that you are willing to risk – remember the downside risk is the capital placed, but the upside risk is potentially unlimited!!
What makes the Forex Market Unique?
There are several elements that make the Forex market unique:
The first is its size
The Forex market is by far the largest financial market in the world. It is reported that daily turnover has now exceeded $3 Trillion. To put this number in perspective, imagine a financial market that is over five times as large as all the World’s equity markets combined – in simple term that’s huge, and that’s the Forex market!
The second is liquidity
The Forex market is by far the most liquid market in the world. Trading in the FX market occurs 24-hours a day, non-stop, no matter where you are in the world, no matter what time it is, and no matter what your trade size big or small, you can enter or exit your trade with ease.
The third is transparency
The Forex market is by far the most transparent market in the world. It is impossible for one player to move the market in foreign exchange. In other financial markets large players moving large sums of money in or out of a share or commodity can cause the price of the particular share or commodity to jump; this is known as a gap.
Moving currency prices is very difficult, it usually takes countries with a combined effort and multi-billion dollar amounts to move currencies in the FX market.
You may be asking yourself,
“OK, so the Forex market it’s huge, but why should I care?”
There is a simple answer to that; size, liquidity, transparency, it all points to a market that is easily accessible 24-hours a day and no non-government body is really able to influence the market – that means everyone trading in the market has the same chances of making money whether your trading $10,000 or $100 million, there is no inside information, there are no limitations on when to trade or in which direction and these are only the first points on why everyone is choosing to trade in Forex rather than any other financial market.
