The foreign exchange or ‘Forex Market’ is the world’s largest financial market. It is a non-stop cash market where currencies of nations are traded off-exchange through brokers.

It is estimated that, on average, $3.6 trillion is traded each day in the world Forex markets. The vast majority of Forex trading does not occur on any one centralized or organized exchange but through brokers on the interbank currency market. The interbank currency market is a twenty four hour market that follows the sun around the world. Opening in Australia and closing in the U.S. Whilst the market exists for organizations with exchange risk, speculators also participate in the Forex markets in an effort to profit from their expectations regarding shifts in exchange rates.

Who trades Forex

In the early part, the Forex market was used by institutional investors that transacted large amounts for commercial and investment purposes. Today however, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long term holders and hedge funds all use the Forex market to pay for goods and services, transact in financial assets and speculate or to reduce the risk of currency movements by hedging their exposure or increasing their exposure through speculation.

In today’s information superhighway the Forex market is no longer solely for the institutional investor. The last 10 years have seen an increase in non-institutional traders accessing the Forex market and the benefits it offers. Trading platforms such as MetaQuotes MetaTrader have been developed specifically for the private investor and educational material has become more readily available. These have all added to the attractiveness of the Forex market for the private investor.
 

The growth in the Forex market over the last decade has led to a number of advantages for the private investor. Trading material to educate the trader has become far more readily available. Support services via forums have become increasingly popular and in the event that you the private investor no longer wish to trade the account yourself, you have professional money managers that will take-over via managed accounts. In brief the main advantages for the private investor and the shorter term trader are:

24 hour trading, 5 days a week with 24 hour cover provided by the broker.

  • HotForex provides 24 hour cover for its clients
  • Cover from Sunday night through to Friday night.

An enormous liquid market.

  • $3.6 trillion traded daily

Market volatility.

  • The Forex market is constantly moving providing volatility. It is this volatility that provides both long and short term traders the opportunity to profit from the Forex market.

Products that are traded

  • With over twenty products being offered there are always opportunities in the market.

The ability to go long or sell short.

  • You are not restricted to long positions only. If you believe that a currency pair is going down you have the ability to take a short position.

Low margin requirements.

  • With the low margin requirement you are able to leverage your account up to 1000.

A Wealth of Trading Resources & Forums.

  • The internet and growth in the retail forex market has led to a wealth of free trading resources via the internet.
  • Forums dedicated to the pursuit of successful forex trading.