Definition of FOREX
FOREX is the foreign exchange market. Other markets trade stocks, but this one trades world currencies. A FOREX trader might trade the U.S. dollar for the English pound, for example. This market can be a profitable investment opportunity.
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History
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The foreign exchange market started in the 1970s. Before then, each currency was pegged to a certain price level by the Bretton-Woods Agreement. When this agreement dissolved, currencies could gain or lose value like any other commodity. FOREX traders decided to take advantage of this, and a market was born.
Size
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The FOREX market is different from all other markets because of its large size. About $3.5 trillion is traded each day by banks and other investors.
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Investors
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Banks and large companies are the big players, but smaller institutions and even individuals are involved.
Access
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Investing in the foreign exchange market has many benefits. Since the money is traded all over the world, the market is always open and you can trade any time of the day or night. Since there are so many traders in the FOREX market, there is extra liquidity, which means you will always have someone to sell your currency to.
Potential
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The Internet has helped the foreign exchange market grow larger, and it is expected to continue to expand.
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