The foreign currency trading market is the trading of one currency against another. Most of the major pairs include the US dollar (USD). The main players are the British pound (GBP), the Euro (EUR), the Japanese Yen (JPY), the Swiss franc (CHF), plus the Australian, New Zealand and Canadian dollars (AUD, NZD, and CAD).
Currencies fluctuate because of economic and political reasons, even the interest rates of different countries. They can also be affected by supply and demand of the currency itself. Currencies function as commodities; they can be bought and sold. People do it on a small scale whenever they are planning for a trip to another country. Banks have been doing it for years as a means to make money on the differences between forex trading.
Recently the market has become available to the average trader, to trade on a level playing field with the banks and large traders. The Internet is largely responsible for access to such a lucrative market. The market has become virtually transparent. The fees for forex trading are basically non-existent and anyone can open a trading account with a few hundred dollars.
And there is money to be made. This is not easy money. There are skills to be learned. A bit of luck doesn’t hurt. You must also understand that you can lose as quickly as you win. This is risk investing and needs to be done with disposable funds. The hours can be long too! Especially if you don’t live in the main foreign currency trading time zone of your pairs. There are good, as in active, times to trade and slow periods. They are predictable. But the best times may be in the middle of the night where you live. It can really mess with normal schedules.
This currency trading takes place online. In the privacy of your home, in your boxers. No mad floor of the stock or commodities exchange. No suits. And virtually no middle men. Just you and the forex trading system. Win or lose. It’s just you.