This Is Currency Trading

Many traders and investors are fully aware of the several financial markets available for trading, such as stock markets, commodity markets and bond markets. However, a lot of people tend to neglect the practice of currency trading. The are several synonyms for currency trading, such as forex trading and fx trading. No matter what you call it, the one thing a lot of people do not realize about the forex market is that it is the largest, most liquid financial market in the world. Normally, one might assume that one of the big stock exchanges might be the largest financial market, such as the New York Stock Exchange (NYSE). The truth of the matter is that the forex market, or currency market, is larger than all stock exchanges put together! It is several times the size of the New York Stock Exchange with an estimated average daily volume of 5 trillion dollars.

Now, that large volume might be a bit misleading at a first glance. Traders speculating in the forex market for profits do not account for the whole volume, a lot of people participate in the forex market unintentionally on a daily basis. Think about it, if you are travelling to a country with a different currency than your own, what do you do? Most likely, you will pay a visit to an exchange office either in your country or the country you are visiting. Lets say that you are a U.S. resident travelling to Germany. At the exchange office, your aim is to buy euros so you can shop in boutiques and eat at restaurants in Germany. Obviously, the cashier will not just hand you a bunch of euros, even though that would be a good deal for you. You will have to pay for your euros, just like you pay for any other product or service. When you buy euros and hand over U.S. dollars, you are in essence making a currency trade. Every time someone buys one currency in exchange for another, they are participating in the forex market. This also applies to companies making global trades. When they import or export goods to foreign markets, someone either receives or pays money in a foreign currency.

Even though there are a lot of different parties participating in the forex market, investors trading currencies in search of profits account for a substantial amount of the daily trading volume. If you start trading currencies, you will be trading against millions of people all over the world in search for profits.

There are many online brokers providing forex-trading platforms that, just like any other brokerage, charge a fee. If you are looking to trade currencies, you can enjoy lower trading fees by trading through an introducing broker who offers forex rebates. If you do decide to trade through an introducing broker, be sure to confirm the authenticity of their offer by contacting the broker you decide to trade at and ask them about their relationship to the forex rebates provider.

Source by Clay Carlsson