Facts About Forex:

• The largest financial market in the world with US $1.9 trillion in daily turnover volume.


• Unlike the stock market, a profit can be made in a rising market - or a falling market.


• The large size of the Forex makes it highly liquid and creates a market that a trader can quickly get in and out of.
• Leverage is used by a trader such that a small deposit amount can control a very large amount of currency. Example: $50 controls $10,000 with 200:1 leverage.

The Foreign Exchange Currency Market is the largest financial market in the world.

This market is 24-hour, starting in Sydney and working around the globe through Tokyo, London, and on to New York. One currency is sold, while another is bought. This is done with pairs of currencies. For example, the Euro/US Dollar (EUR/USD) or Great British Pound/US Dollar (GBP/USD).

Current values fluctuate moment by moment because many international companies buy or sell products in a foreign country and then must convert profits into their domestic currency. This only accounts for 5% of the daily turnover in the Forex market. The other 95% of turnover is created by trading for profit, or speculation.

Foreign exchange trading is mostly done by Internet or phone and for this reason, it is considered an Over The Counter (OTC) or "interbank" market. Therefore, trading is de-centralized and not conducted on a central exchange as with the stock market or the futures market. For a more detailed explanation of the Forex, read this National Futures Association paper.