Defining Forex- The definition of foreign exchange trading is very straight forward as the trading of one currency in exchange for another. This market is the largest, richest and most liquid on the face of the earth. Trades are conducted twenty-four hours a day, seven days per week, non-stop trading in other words. An estimated US$1.5 trillion dollars is traded per day. Market participants include banks, corporations, individuals and speculators. Government and commercial currency conversions make up five percent of daily volumes, the volume difference consists out of speculations and trading.

Advantages- Foreign exchange trading has major advantages including high liquidity, all day and all night trading due to overlapping trading session, traders are given the chance to react to market, economical and political events as they occur, low transaction costs and trade on margin opportunities.

Risk- The risk involved with forex trading is just as high as the possible reward. However it’s very important to understand that you stand the chance of losing not only any profits made but also your total initial investment. If you are gambling on the market with money you don’t actually have or you are not willing to loose, rather avoid it. Should you feel uncertain about this trade type, follow your gut feeling and rather steer clear from trading. Invest in trade courses or books on the subject to assist you with understanding the mechanics of the market before serious trading is attempted

Spot and rollover’s- Forex is normally traded on spot, meaning that trades are completed on at spot rate and settled within 2 business days. However, rollovers may sometimes occur where positions remain open and roll-over onto the next settlement day, expire and settle at next rate.

Quoting- Quotes refer to offer or asking price of the two currencies. The asking price will be on the right and offer on left side when indicated.

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