Why Trade the Forex Market

Trading the Forex market has become very popular in the last
years. Technology advances like the internet have spawned
this new trading craze, where anyone with a secure internet
connection prepared to undertake a small amount of training
can engage in trading foreign exchange on the forex market.
Before the Internet, only corporations and wealthy individuals
could trade currencies in the Forex market through the use of
proprietary trading systems of banks, often through private
banking.
The foreign exchange market is one of the largest in the world
if not the largest. It is more than 3 times larger than the stock
/equities market and more than 5 times bigger than futures,
give Forex traders nearly unlimited liquidity and flexibility.
It has been estimated that approximately $2 trillion USD of
currency exchanges hands each and every day.
The foreign currency markets are very liquid because
worldwide, the most powerful international banks provide
a market around the clock. The Global foreign exchange
market daily averages of the Bank for International
Settlements in 1998 were $660 billion and now have increased
to $2.3 trillion (2006).
There is really no insider information in the forex markets.
Since exchange rates are calculated by actual money flow as
well as by the outlook of financial flowage, which takes into
consideration such things as inflation, GDP changes, trade
and budget deficits and surpluses, as well as interest rates,
it would be difficult to come across so-called 'insider
information'. All of these factors are self-evident, though
different projected outlooks may prove more accurate
than others. There is less room for market manipulation
is there may be for thinly traded stocks.
A equally important property of forex market is the fact that
trends in forex market last longer and are more clearly
defined than in any other trading instrument. Analysis of
forex market charts also often displays identifiable chart
patterns of price movement and once a pattern is established,
the trend or pattern becomes the most probable course of
future price action until the market changes. Because the
FOREX market is so huge, there is no possibility of
someone controlling the market price for a long time. When
there are a lot of buyers and a lot of sellers, you can expect
to buy or sell at a price that is very close to the last market
price. The market maker in the forex market is usually a
bank or brokerage company that provides during the trading
day a bid and ask price. Example of forex market makers
include CMS Forex, GFS, Forex, Forex Capital Markets
(FXCM), and Global Forex Trading, all of which are
regulated by the Commodity Futures Trading Commission
(CFTC) of the USA.
Brokers offer clients access to online FX trading system,
platform or software that can make it easy and fun to
trade the market and usually there are usually no
commission charges. With these trading systems and
platforms you can trade the forex markets for free
using the same state-of-the-art software packages that
professional Forex traders use to help them make
real-time, live currency trades. So individuals with
a few hundreds of their own currency hope to buy
and sell something for a smiling profit. Speculators
trade to make a profit by purchasing one currency
and simultaneously selling another.
In conclusion I think the FOREX market is one of the
best investment opportunities around today. There
are great opportunities in the FOREX market because
of the constant movements of the exchange rates. There
is no surprise that more and more traders are turning
to the foreign currency market to take advantage of
the fluctuation in exchange currency rates as a way to
speculate and trade to increase their capital and wealth.