Most people have probably already heard about Forex, but few actually understand how it works. A basic introduction to Forex trading can provide an overview and help and decide whether it is worth pursuing.
As of 2011, Forex has become a trillion-dollar industry involving a vast number of institutions which include banks, private businesses, governments and speculators, among others. And it is still growing. While previously it was only available to big players, the emergence of online forex brokers has made it possible for almost everyone to become part of this ever growing market. Nowadays most traders can start with just a few hundred dollars as capital or even a dollar if one merely wishes to open demo accounts to get a feel of how the system works.
The Foreign Exchange (Forex, or FX) Market is a global market where investors speculate on, and buy and sell currencies. With its follow the sun operating hours, the market is made available for business 24 hours a day with the first major market opening Monday in Tokyo, followed by the overactive market in London, and ends Friday in New York.
Just like any type of business venture there are certain strategies that help shape every buy or sell decision taken by traders involved in the currency market. Global current events are closely monitored and analyzed to understand the currency fluctuations that might occur as an effect of these events. Most trading brokers maintain a Forex calendar in order to closely track these events.
Many traders use Forex charts in order to quantify and better understand the trends globally. There are three typical charts used: the line, the bar and the candlestick. The most commonly used of these Forex charts is the candlestick which offers a clearer picture of the buyer-seller struggle with a color-coded approach to up-trends or downtrends which makes it easier to see the fluctuations. As such resent currency and thus exchange-rate volatility have led to considerable returns for forex investors who have taken the right positions before and during, e.g., revolutions in the Arab world or anti-austerity riots in Europe.