Forex is the trading of currency pairs rather than mutual funds, commodities, bonds, stocks and indices. The goal of the trade is for the trader to predict the movement, either up or down, of the exchange rate on the open, exchange market. The Forex market operates 24 hours a day beginning on Sunday and ending on Friday. The Forex market is generally not open on major holidays.
The currency exchange was only open to major financial institutions and banks, at one time, but today the Forex market is open to all, including individuals and companies, as well as banks and other financial institutions.
Forex can be conducted through traditional brokerage houses and investment firms or a trader can sign on with one of the many online Forex providers and conduct trades online without the use of a broker. Some traders prefer to hire the services of a professionally trained Forex trader to conduct trades on their behalf using one of the many online platforms.
Successful Forex trading is the result of developing or adopting strategies and putting them into a plan. Most Forex trading platforms will include a “Stop Trade” feature that gives the trader the ability to set a minimum and maximum time frame for the trade to run. The time frames, or expiry, are tied to time zones when trading is brisk. The minimum price the trader specifies will stop the trade and can save the trade from bottoming out and not generating a profit.
Another trading strategy might be to trade only during certain time frames and that can be based on certain economic factors. The factors often are based on identifying trends and having a little knowledge about what events may trigger a certain trend. This strategy is often used by experienced traders who follow the market closely, but a lesser experienced trader can always jump in the deep end of the pool and sink or swim, but has more of a chance to swim if they take advantage of the analytical tools available.
For the experienced Forex trader, this can be a very profitable method of generating income or wealth in general. The availability of the platforms on the market makes it very easy for anyone to get involved and join the Forex trading market. There is still a certain level of risk involved and the trader has to determine how much risk they are willing to take and value their trades accordingly.