FOREX TRADING stands for the purchasing of one currency at the same time selling another. In simple terms, the currency sold is exchanged for the currency bought. Currencies typically trade in pairs. Trading of the Euro to the US Dollar or the US Dollar to the Japanese Yen are examples. The most liquid and biggest currency pairs comprise the bulk of the FOREX TRADING volume. Major currencies are the US Dollar, the Euro, the British Pound, the Japanese Yen, the Swiss Franc, the Australian Dollar, and the Canadian Dollar. Trading of these currencies are in such huge volumes that they alone compose 85% of daily FOREX TRADING. FOREX TRADING came into being due to trade and investment between companies across different countries.

No matter how you choose to make money with your investments – whether it be with swing trading stocks, investing in stocks, or stock investing – you should know there are some benefits of choosing forex trading. Huge trading volumes, decentralized system, and virtually uninterrupted trading hours are three characteristics of FOREX TRADING. High profits are attained due to the huge volumes of trading foreign currencies. It is in fact the most traded fixed income market with its average daily turnover reaching US$3.2 trillion. Unlike the stock market, FOREX TRADING does not have a centralized exchange. The telephone and an electronic network are the medium used by participants in these transactions. Lastly, FOREX TRADING happens practically 24 hours a day except weekends. Opening at the start of the business day in Sydney, it moves on to Tokyo, then London, then New York. Due to this feature, participants and investors can monitor and respond to any market fluctuations whether it happens during the day or at night.

Participation in the FOREX TRADING market happens across different levels of financial institutions. Central banks, investment firms, commercial banks, remittance companies, and commercial companies are among these institutions. Investment firms and commercial banks trade either in behalf of their clients or for their own accounts. Central banks’ participation in FOREX TRADING is often in their respective economies’ interests. Central banks can use their vast forex reserves to stabilize the market or a currency. Participation of remittance companies happen due to the flow of money from countries with a huge population of migrant workers to these workers’ home countries. Trading participation of commercial companies is comparatively lower as their FOREX TRADING is being done as a consequence of paying for goods or services. Retail traders or individuals engage in FOREX TRADING through banks.

Participants of FOREX TRADING have developed and used several strategies in maximizing profits just like in any market. One of the most common strategies is the candlestick charting strategy. Candlestick charts were developed by a Japanese rice trader in the 18th century to predict market and price movements in the rice exchange at that time. Stock, forex, and commodities markets presently use the candlestick chart as an indispensable tool for decision making.