FOREX 101

The Foreign Exchange Market, or Forex market is a worldwide market where buying and selling of currencies takes place. These transactions take place 5 days a week, 24 hours a day and daily are worth approximately 1.5 trillion dollars (US). The Forex market opened in 1971 when the fixed currency exchanges market was closed. Thanks to the technology now available this market has grown from trading 70 billion dollars (US) a day to the current level.

There are approximately 5,000 institutions in Forex. Some are banks, some commercial companies and some foreign currency brokers. The largest Forex trading centers are located in New York, London, Tokyo, Hong Kong, Paris, Frankfurt, Singapore and Paris.

As mentioned above, technology has produced a boom in the Forex market. With the advent of online investing even small investors can take advantage of the Forex market. Over the years many regulations have changed allowing smaller transactions to take place. There are no longer minimum transaction sizes.

Some of the advantages to Forex are:

Because there are always movements between currencies even small changes can result in profits for investors. This is due to the fact that the market is broken down into what are called lots. Each lot is worth approximately 100 thousand dollars (US). Individuals can invest through what are called leverage loans. Generally a $1,000.00 investment can get you started.

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