How does Forex trading work?

Forex is traded in pairs: USD/Euro, USD/JPY, Euro/JPY, GBP/CHF, and CAD/USD. It is considered as Over-the-Counter or Inter-bank as trades are done between two counterparts via electronic network or telephone connections. Forex works truly as a 24-hour market. Everyday Forex trade begins when the financial centers in Sydney start their day, and moves around the globe to Tokyo, London, and then New York. Traders can always response to the market regardless of the local time.

What are the major traded currencies?

Major traded currencies are United States dollars, Australian Dollars, Japanese Yens, British Pounds, Swiss Francs, Canadian Dollars, and the Euro Dollars.

What are the working hours of Forex market?

Forex market is open from 22:00 GMT Sunday (opening of Australia trading session) till 22:00 GMT Friday (closing of USA trading session).

How much funds do I need to open an account?

The minimum deposit to open a standard account is US$2,500. A minimum transaction size is US$100,000 with a minimum margin deposit of $2,500 (at 100:1 leverage).

What is margin?

Margin is money you need to have in your broker account to secure your open position. Different brokers require different amount of margin money to keep your positions open.

What is leverage?

Leverage is a loan that is provided to an investor by the broker that is handling his or her Forex account. When an investor decides to invest in the Forex market, he or she must first open up a margin account with a broker.

Who trades Forex?

The trading of foreign exchange has been dominated by the large international banks. Corporations and money managers have always traded their forex with their preferred bank, which then covers the position in the Interbank market. However, with the recent availability of internet based trading systems there has been a rapid growth in the number of private individuals trading forex.