What is Forex , FX, Foreign eXchange?

The Foreign Exchange market, also known as the Forex or FX market, was created in the early seventies as the international money markets evolved to a floating exchange rate system. Unlike other financial markets that operate in a centralised location via an exchange, Forex is simply a global network of central banks, financial institutions, corporations and individual traders all involved in the buying and selling of national currencies.

Another feature of the Forex market is that it operates 24 hours a day, 5 days a week from all the major financial centres of the world. Opening in Wellington, New Zealand and trading right through to New York via Sydney, Tokyo, Hong Kong and London. The extremely high volumes, estimated at US$ 4 trillion daily, deep liquidity and geographical dispersion characterises Forex as a market attractive to investors and speculators.

How to make money trading on Forex?

The foreign exchange market is the largest and most liquid financial market in the world. Traders include large banks, central banks, currency speculators, corporations, governments, and other financial institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements. Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.

Of the $3.98 trillion daily global turnover, trading in London accounted for around $1.36 trillion, or 34.1% of the total, making London by far the global center for foreign exchange. In second and third places respectively, trading in New York accounted for 16.6%, and Tokyo accounted for 6.0%. In addition to "traditional" turnover, $2.1 trillion was traded in derivatives