The foreign exchange market is one of the most popular markets for speculation due to its enormous size, liquidity, and the tendency currencies have to move in strong trends. Commonly referred to as the Forex or FX market, foreign exchange is the largest financial market in the world with a daily volume of over US $1 trillion.
Unlike other financial markets, investors in FX can respond to currency fluctuations caused by economic, social and political events day or night as the market is open 24 hours a day. Trading begins each day in Sydney and continues uninterrupted throughout the day as major financial centers around the world open their books.
Unlike many major equities and futures markets, the structure of the FX market is highly decentralized. The FX market is considered an Over The Counter (OTC) or 'interbank' market, due to the fact that transactions are conducted directly between two counterparts. Trading is not centralized on an exchange, as with the stock and futures markets.
The make-up and structure of the FX market create efficiencies that are highly beneficial to investors. Some of them include:
• Constant Liquidity
• Commission Free Trading
• Easy and Precise Risk Management
• 24 Hour Trading
