The Forex marketplace as we know it today was established in 1971 when the Forex Exchange was formed. Prior to that point currencies were pegged to the Dollar, but after the formation of the new Exchange the currencies were able to float freely. Over the last 38 years there has been an extraordinary rise in volume in this market, which has seen it reach a level today, where some $3 – 4 Trillion are going through the Exchange on a daily basis – quite staggering volumes of money! With the world-wide spread of high-speed Broadband Internet access, this huge market now offers excellent opportunities for the individual traders like you and me to profit for 5 main reasons…
24 Hour Per Day / 5 Days Per Week Market Operation
Unlike many markets, which have a fixed Exchange in say New York or London, with fixed daily trading hours, there is no central exchange for the Forex market. Therefore it is a truly global market, which is open 24 Hours per day / 5 Days per week – so you can trade the market at any time to suit you wherever you are in the world. The key trading times move around the world – first the South East Asian session, moving into the European session, which in turn moves into the US session in a seamless flow.
One of the main criteria for trading any market should be the fact that you can enter and exit your trades, exactly when you want to, as opposed to needing to wait for someone to match your trade. Due to the staggering volumes traded every day on the Forex markets, as mentioned at the beginning of this article, there is huge liquidity in this marketplace. Therefore you can be assured (certainly at the level that most individuals are trading) that you will be able to get in and out of the market almost instantaneously.
Narrow Broker Spreads
Due to the huge volumes traded every day and the enormous number of people who are placing trades, the Broker spreads (i.e. the difference between the Bid and Offer prices) are very narrow on the major currency pairs, so that you are not paying high commissions on each trade that you take. This means that the price does not have to move very far in your desired direction before your trade moves into profit.
Price Movement or Volatility
In order to make money on trading, you need significant price movement and due to the global 24 hour nature of this market and the volumes being traded, the Forex market supplies this price movement (often referred to as volatility) in abundance, particularly at the beginning and end of each global session.
Training Material Available
Due to the massive increase in popularity of Forex trading today, there is now available a wealth of excellent training material, courses, charting packages and automated software to suit all budgets to help the individual achieve his/her goals.
Whilst people must never forget that all financial trading carries a high element of risk, the Forex market supplies all the elements required for the informed individual trader to trade successfully.
Source by Peter R Burgess www.positivestocks.com