• Saturday, 22 November 2008 07:44
• Last Updated Sunday, 30 November 2008 07:45
• Written by Desmond Wira

Forex (Foreign Exchange) is the name given to the acivity of trading of foreign currencies. This is world's most liquid market, and the largest in value. In the past, forex trading was limited only to banks and other institutional traders. But today online trading platforms allow small traders like YOU to earn from trading foreign currencies. Some of us may not familiar with forex. So, this article will attempt to give you some information about forex

Forex trrading has many attractions for investors and traders compared to stock market for example. Here I list several of them:

• You can access 24-hour trading, 5 days a week with non-stop access to global Forex dealers.
• Forex has an enormous liquid market making it easy to trade most currencies.
• Forex has volatile markets offering profit opportunities.
• The ability to profit in rising or falling markets.
• Leveraged trading with low margin requirements. That means you need only a little monye to start forex trading. Sometimes you can start trading WITHOUT MONEY AT ALL

The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs. For example, the exchange rate of EUR/USD on 2003 was 1.0857. This number is also referred to as a "Forex rate" or just "rate" for short. If the investor had bought 1000 euros on that date, he would have paid 1085.70 U.S. dollars. One year later, the Forex rate was 1.2083, which means that the value of the euro (the numerator of the EUR/USD ratio) increased in relation to the U.S. dollar. The investor could now sell the 1000 euros in order to receive 1208.30 dollars. Therefore, the investor would have profit USD 122.60. This is just a rough example. In Forex, you can profit even in minutes.

However, it is estimated that anywhere from 70%-90% of the FX market is speculative. That means forex trading can yield high profits, but it is also very risky. But, if you can enter forex trading without money at all, why don't you try. In the next article I will show you how to do it