About the Forex Market
With an average volume of $3 trillion traded each day, the Forex market is one of the largest and most attractive markets in the world. Forex is where investors – institutions and individuals alike – can trade foreign currencies on a global scale (see Forex Definition).
In the past, Forex was done mainly through banks and was the exclusive privilege of large financial institutions. Today, with the advent of new Internet technologies, investors (including individuals) have many more options to choose from to diversify their portfolio. Indeed, many online Forex trading companies have emerged and now offer a wide range of services for traders all over the world, via their online Forex trading platforms. Using these platforms – such as our partner platform, Finotec – traders can view real-time rates and by a simple mouse click, they can buy or sell currencies from across the globe.
Forex plays a crucial role in how economies are controlled and future payments are made and received. Importing and exporting of goods is one of many examples. Some of the major benefits to this market are reflected in the trader’s ability to make a small deposit into his/her trading account and receive huge leverage.
In a Forex transaction, traders concurrently buy one currency and sell another. Currencies are traded in pairs and when one currency strengthens, the other automatically weakens against this currency. In Forex, brokers do not usually charge commissions, whatever their clients’ trading frequency and transaction size. Traders can trade from as low as $10,000 (with leverage) and as high as $1 billion. Actually, most brokers, including our client Finotec, offer accounts starting from as low as $200. This means that today, with the advantage of leverage, almost anyone can trade Forex.
The main participants in the Forex market are Central Banks, commercial and investment banks, hedge funds, corporations and private speculators.