Forex, or the Foreign Exchange market, is the largest securities market in the world, easily dwarfing all other markets. Forex trading is over 30 times larger than all of the United States markets combined. In addition, the average turnover in Forex trading per day is almost 2 billion dollars.
Unlike the stock exchanges known to most people, the Forex is the act of buying and selling of currencies. The currencies traded on the Forex trading market are currencies that are traded around the world. The Forex trading system is based on the buying of one currency while simultaneously selling another currency. For instance, an investor may have United States Dollars that they wish to sell to buy Japanese Yen.
Over 85 percent of the daily trading on the Forex involves the ?Majors?. This term refers to a group of currencies which include the Euro, British Pound, U.S. Dollar, Japanese Yen, Swiss Franc, Australian Dollar, and Canadian Dollar. These currencies are the most liquid for speculators who make up over 95% of this over the counter market.
The Forex is a true 24 hour market. Trading begins in Sydney each morning. As the day progresses, trading moves to the other major markets around the world until trading finds its way back to Sydney the following day. It is this daily movement that allows investors in the Forex to respond immediately to the fluctuations and nuisances that occur throughout the world minute by minute and hour by hour.