FOREX is literally an abbreviation of the words Foreign Exchange - the trading of International Currencies.The market
The currency trading (FOREX) market is the biggest market on earth with a daily turnover of more than 3 trillion dollars. The participants in this market are banks, organizations, investors and private individuals.
The Forex goods are the currencies of various countries. You buy Euro, paying with US dollars, or you sell Japanese Yens for Canadian dollars. Or perhaps you're simply exchanging the pound or dollar to buy an overseas property.
How does one profit in Forex?
Obviously, you buy cheap and sell for more! The profit potential comes from the fluctuations (changes) in the currency exchange market.
The nice thing about the FOREX market, is that regular daily fluctuations, say - around 1%, are multiplied by 100!
How risky is Forex trading?
If you trade on the futures market, ie agreeing to purchase or sell a currency at some time in the future - the risks can be high due to the nature of the contracts. Options are less risky as they generally carry a maximum risk from the outset. Spot or cash exchange carries no risk. You simply exchange what you've paid for at that days rate. If the curency moves up or down afterwards, it doesn't affect you.
Obviously, you buy cheap and sell for more! The profit potential comes from the fluctuations (changes) in the currency exchange market.
The nice thing about the FOREX market, is that regular daily fluctuations, say - around 1%, are multiplied by 100!
How risky is Forex trading?
If you trade on the futures market, ie agreeing to purchase or sell a currency at some time in the future - the risks can be high due to the nature of the contracts. Options are less risky as they generally carry a maximum risk from the outset. Spot or cash exchange carries no risk. You simply exchange what you've paid for at that days rate. If the curency moves up or down afterwards, it doesn't affect you.
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