Forex
The Forex (Foreign Exchange) is the worlds largest financial market turning over more than $1.5 trillion a day. It is unique in that it has no physical location. Instead of traders buying and selling in a formal marketplace, it takes place through an electronic network of banks. These banks operate around the world and therefore around the clock. The Forex is open from when the bankers arrive at work on Monday morning in New Zealand until they finish work at 5pm in the West Coast of the USA. However the greatest trading volume generally occurs during the European and USA working day.
Trading on the Forex has become increasingly popular during the last few years with an abundance of brokers springing up to cater for the traders who have become interested in it. Competetition between brokers has resulted in ‘commission free‘ brokerage and an abundance of trading education.
Before leaping into the enticing world of Forex trading - the private trader should take time to assess the risk involved. Many Forex brokers operate on leverage of up to 200:1. This means that $200 depostited in your trading account can control $400,000 of buying power on the currency market. Small gains in the currency you have bought can equal large gains in the equity of your trading account. Likewise, small losses in the currency you have bought can easily wipe out your account.
Remember to do your homework before venturing into this market.
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