What Is Forex?

This is common experience that If you’ve ever traveled to outside the country, you usually had to find a currency exchange booth at the airport, and then exchange the currency you have, purse  into the currency of the country you are now present.

You  to the counter and you come to know the different exchange money rates for different currencies. You find “Japanese yen” and think to yourself, "this is great My one dollar is worth 100 yen.....! And I have ten dollars! I’m going to be rich here!!!” (This excitement is quickly finished when you stop by a shop in the airport afterwards to buy a can of cold dirnk  and, all of a sudden, half your money is gone.

When you perform this, you have ve essentially participated in the forex trading! You have exchanged one currency for another. Or in forex trading language, assuming you are an American visiting Japan, you have sold your american dollars and bought Japaneese yen.

Before you fly back to the home, you stop by the currency changing booth to exchange the Japaneese money that you miraculously have left over (Tokyo is expensive city indeed!) and notice the exchange value have changed. It’s these changes in the exchanges rates that allow you to make money in the Forex trading market.

The Forex trading market, which is usually known as “FX,” is the largest money market or financial market in the world. Compared to the approximately, $22.4 billion per day volume of the New York Stock Exchange (NYSE), the foreign exchange market looks absolutely ginormous with its $5.3 TRILLION a day trade volume. Forex rocks our socks!

The one and only largest stock market in the world, In USA the New York Stock Exchange, trades a volume of about $22.4 billion each day. If we used a monster to represent the NYSE, it would look like this…