Foreign exchange currency trading involves trading on the foreign exchange market. This activity is commonly known as FOREX and is also the world's most productive and largest market for financial exchange. This market got it's start in 1973 and quickly became the place where the vast majority of FOREX trading occurs. This article will focus on information related to foreign exchange currency trading that would also be beneficial for the FOREX currency trading beginner.
Why Its Important
Because of the enormous volume associated with the FOREX market has the necessary level of liquidity to be an excellent investment vehicle for foreign currency trading. The biggest distinction that foreign currency trading has to other securities is that it does not work on a fixed exchange rate. The actual trading occurs between commercial banks, central banks, hedge funds, non-banking international corporations, speculators and private investors.
In the not so distant past small investors were kept from trading this because of the large deposit amounts that were required to get started. With the advent of rising competition due in large part to the growth of the Internet the deposit requirements for FOREX have been modified. This allows the smaller investor to now take part in trading foreign currencies.
Additional Reasons For Growth
In addition to the reason just given which makes foreign currency trading available to small investors to begin with there are several other things which have made this attractive to more investors. The biggest reason is that because of the Internet FOREX trading occurs 24/5. Yes twenty four hours a day and 5 days a week. Add this to the accessibility of the market via the internet and you can easily see why it is becoming more and more popular. Keep in mind that the foreign exchange currency trading market provides plenty of volatility which means profit for those that know what they are doing.
