What is Traded on the Foreign Exchange (Forex)? Why Forex is So Popular Now?

By Vera Vernice

The answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded in pairs through a broker or dealer, for example the Euro dollar and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY).

Why FOREX? Why more and more people choose this market?

There are many benefits and advantages to trading Forex. The main reasons of this growing market are:

1. High Liquidity.

There is a huge trading volume daily in forex market, about 3 trillion dollars are traded everyday. This means that with a click of a mouse you can instantaneously buy and sell! You will not be caught in a trade waiting for transaction. You can even set your online trading platform to automatically close your position at your desired profit level (a limit order), and/or close a trade if a trade is going against you (a stop loss order).

2. It's a 24 hour market

From Sunday evening to Friday afternoon EST, the Forex market never sleeps. You can choose when you want to trade--morning, noon or night.

3. Leverage/Margin Trading

Leverage gives trader the ability to make nice profits, and at the same time keep risk capital to a minimum. Eg, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies.

4. Forex market not influence by anyone players, not even the central bank.

The market is si huge that no single entity or bank can control the market prices for extended period of time.

5. The forex market never suffer from any recession

Currencies in this market are traded in pairs. This means that when one currency goes down, another one goes up. This enables you to profit in any case, no matter how the economy of a country or the economy of the world is doing. This is a great advantage of the forex market.

Trading is a skill that you needs to be patiently learned over time. It would be good if you have got a Forex Mentor who will guide you daily. He will steer you through all the obstacles of successful trading. He will give you advices and suggestions that only comes from years of trading experience. Jon Levine, a 15 years veteran in trading, read his reviews here. Visit http://www.myforexpert.com for more information.