INTRODUCTION TO FXThe Foreign Exchange Market also referred to as the "Forex" or "FX" market is the largest financial market in the world, with a daily average turnover of approximately US $3 trillion. In this era of accelerated globalization and economic integration, trading currencies is pragmatic, lucrative and sensible. Yet the ordinary perception of the FX market is that it is too risky, too complicated and best left to big players. Most investors shy away from FX market, imagining that the currency market is a market that you can decide either to be in or out of. The reality, is that you have no choice - NO investor can escape the long reach of the currency market. You can make yourself believe that the dollar's fluctuations don't matter - and then find yourself puzzled and frustrated by seemingly impossible financial trends.
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 speculation.
For speculators, the best trading opportunities are to trade with the most commonly traded currencies, called "the Majors." The currencies of those countries with stable governments, respected central banks, and low inflation. Today, over 85% of all daily transaction involve trading of the major currencies; with include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar, and Australian Dollar.
Historically, Forex trading has been dominated by banks, including central banks, commercial banks and investment banks. However, the percentage of other market participants is rapidly growing, and now includes large multinational corporations, global money managers, registered dealers, international money brokers, option traders and private traders.
Forex Trading is not centralized on an exchange, as with the stock and futures markets. It doesn't have a fixed location of a trading floor. The Forex Market is considered an Over the Counter (OTC) or "Interbank" market. The trading is done over the telephone and at computer terminals, in hundreds of banks around the world simultaneously.
A true 24-hour market, Forex trading begins each day in Auckland, and moves around the globe as the business day begins in each financial centre, first to Tokyo, then 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!
Why Trade FX?
No Short-Selling Restrictions
Forex trading is always done by buying one currency and at the same time selling another currency. Therefore, trader can easily trade and find profit opportunities in both rising and falling market.
A Very Liquid Market
With daily turnover of US$1.9 trillion, Forex market is by far the most liquid and most traded market in the world. Its sheer volume help to stabilise forex market under any conditions. Almost 90% of all forex transactions involve the so-called Major currencies.
Trade on Your Schedule
Forex market moves around the clock, 24-hours a day, opening continuously from 5:00PM ET on Sunday through Friday. With 3 markets to follow, Asian, European and American markets, investors can arrange their trading schedules and respond to any news or fluctuations promptly.
We offer a 100:1 leverage on our trading accounts.