WHAT IS FOREX ?

The FOReign EXchange market (FOREX), is the largest financial market in the world, with a volume of over 3,5 trillion US dollars a day. The Forex market actually equates to more than three times the total amount of the stocks and futures markets combined!
The Forex market has neither a central exchange nor a physical location. It is considered an 'Interbank' market, due to the fact that the entire market is run electronically and continuously over a 24-hour period for five and a half days, within a network of banks.

The most popular currencies along with their symbols are shown below:

USD  United States Dollar
EUR  Euro members Euro
JPY   Japan Yen
GBP  Great Britain Pound
CHF  Switzerland Franc
CAD  Canada Dollar
AUD  Australia Dollar
NZD  New Zealand Dollar

Forex currency symbols are always three letters. The first two letters identify the name of the country and the third letter identifies the name of that country’s currency.
Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer and always traded in pairs.

For example the Euro and the US dollar (EUR/USD), the Euro and the Japanese Yen (EUR/JPY),the US dollar and the Canadian Dollar (USD/CAD) and so on.

In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies.
In the past Forex was intended to be used by bankers, large companies and institutions. However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to all, the “big” and the “small” traders.
All you need to get started is a not too old computer, a high-speed Internet connection, and a proper training.

THE SPOT MARKET

A spot market is any market that deals in the current price of a financial instrument.
The spot forex (FX) market is really unique within the world markets, because at any time, somewhere around the world a financial center is open for business, and banks and other institutions exchange currencies every hour of the day.
You can trade in the morning, in the evening or at night.

Time Zone             New York          GMT
Tokyo Open           7:00 pm             0:00
Tokyo Close           4:00 am             9:00
London Open         3:00 am             8:00
London Close       12:00 pm          17:00
New York Open     8:00 am          13:00
New York Close     5:00 pm          22:00

The dollar is the most traded currency, being on one side of almost 90% of all transactions. The Euro follows with close to 40% and the yen with about 20%.

WHY TRADE FOREX?

There are many benefits and advantages to trading Forex. Here we name just a few reasons why so many people are choosing the forex market:

• No commissions.

No clearing fees, no exchange fees, no government fees, no brokerage fees. Brokers are compensated for their services through the so called 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 Forex market you determine your own lot size. This allows traders to participate with very small accounts, like for example $100 or even less.

• 24-hour market.

From Sunday evening to Friday afternoon EST, the Forex market never sleeps. This is a great opportunity for people who want to trade on a part-time basis, because they can choose when they want to trade-morning, noon or even at night.

• No one can "control" the market.

The foreign exchange market is so huge that no single entity can control the market price for an extended period of time.

• High Liquidity.

Because the Forex Market is so big, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will. You are never really "stuck" in a trade.
You can even set your online trading platform to automatically close your position at your desired profit level (a limit order), and close a trade if it is going against you (a stop loss order).

• Leverage.

In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum. Forex brokers offer 100, 200, even up to 400 to 1 leverage. But leverage can be a dangerous thing if you don’t have a proper risk and money management.

• Free Demo Accounts, News, and Charts.

• Almost every Forex brokers offer demo accounts to practice trading, along with breaking Forex news and charting services. These are very valuable resources for all traders who would like to hone their trading skills with “fake” money before opening a live trading account and start risking real money.

• Micro and Mini accounts

You do not need much money to start trading in the forex market. Online Forex brokers offer "mini" and “micro” trading accounts, some with a minimum account deposit of $100 or less.