The Foreign Exchange Market

The Foreign Exchange Market, also referred to as the "Forex" or "Retail Forex" or “FX” or "Spot FX" or just "Spot" is the largest financial market in the world, and has an average daily turnover of US$2 trillion. Meaning, it is 30 times larger than all the US equity markets combined.

What Is Traded on the Foreign Exchange?
The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the Euro and the US Dollar (EUR/USD) or the British Pound and the New Zeeland Dollar (GBP/NZD).

Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, New Zeeland Dollar, you are in effect buying a share in the New Zeeland economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the New Zeeland economy.

In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies.

Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.



What is a Spot Market?

According to Wikipedia, the spot market or cash market is a commodities or securities market in which goods are sold for cash and delivered immediately. Contracts bought and sold on these markets are immediately effective. Spot markets can operate wherever the infrastructure exists to conduct the transaction. The spot market for most securities exists primarily on the internet.

Which Currencies Are Traded on Forex Market?

There are commonly known Forex currencies that traders refer to as “the majors” because of their liquidity. The majors today are: US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. The most popular currencies along with their symbols are shown below:

Symbol	Country	Currency
USD	United States	Dollar
EUR	Euro members	Euro
JPY	Japan	Yen
GBP	Great Britain	Pound
CHF	Switzerland	Franc
CAD	Canada	Dollar
AUD	Australia	Dollar
NZD	New Zealand	Dollar

When Can Currencies Be Traded?

The spot FX market is unique within the world markets. It’s like a Super Wal-Mart where the market is open 24-hours a day. The FX market has superior liquidity making it easy to get in and out at the prices you want, because it runs 24 hours a day. Traders see the Forex market as the most lucrative because of this benefit.

Time Zone	New York	GMT
Tokyo Open	7:00 pm	0:00
Tokyo Close	4:00 am	9:00
London Open	3:00 am	8:00
London Close	12:00 pm	17:00
New York Open	8:00 am	13:00
New York Close	5:00 pm	22:00

Over The Counter Market

The Forex OTC market is by far the biggest and most popular financial market in the world, traded globally by a large number of individuals and organizations. In the OTC market, participants in this market determine who they want to trade with depending on trading conditions, attractiveness of prices and reputation of the trading counterpart. The most traded currency is the Dollar, followed by Euro and Yen.


Making Money Through Forex Trading

It shouldn’t be misconstrued that making money through Forex trading is easy. As any online or offline business, about 90% of traders end up with less money than they started. Furthermore, 5% of them break even and only the remaining 5% profit consistently. Successful trading in Forex takes skill and perseverance.

In the Forex market there are special indicators that filter the top traders from the rest. Successful Forex traders have the knowledge needed in the market. They know that every day in the market they can learn something new and are always ready for anything. These experts have a accurate Forex trading system. They are very meticulous and disciplined in following their Forex system thoroughly. They also consider the price behaviour into this system.

A trader cannot succeed without funds in his trading accounts, so money management is one of the most important issues in Forex trading. Successful traders know how to stay away from taking the unnecessary risks.

These are few basic Forex dynamics controlling the success rate of Forex Traders. It is more than just a possibility for a trader to make profits in the Forex Market. Trading on Forex market is a process, it takes time for a trader to master it and be on top. It depends only on you to be or not to be a successful trader on this market...