About Forex

Unlike other financial markets, the foreign exchange market (Forex) has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another. The absence of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another across the major financial centres.

When Forex is broken into its component parts, it reveals several advantages that make its use a winning choice for investors:

• 24-hour market - The Forex market never closes.
• High liquidity - With an average trading volume of over $2.5 trillion per day, Forex is the most liquid market in the world.
• Low transactions costs - In the currency market there are no commissions and no exchange fees, because the trader deals directly with a broker and in a purely electronic exchange.
• High leverage - Forex investors are permitted to trade foreign currencies on a highly-leveraged basis. In some instances an investment may be leveraged up to 100 times its nominal value; so, an investment of US $1,000 would control US $100,000 of any particular currency.
• Uncorrelated to the stock market - A trade in the Forex market involves selling or buying one currency against another. Thus, there is no correlation between the foreign currency market and the stock market.
• No one can corner the market - The Forex market is so vast and has so many participants that no single entity, not even a central bank, can control the market price for an extended period of time.