Forex trading is a 24/7/365 cash market which consists entirely of foreign currency trading. Typically administered by brokers, foreign currencies are constantly bought and sold across global markets. Traders’ investments increase or decrease in value based upon currency fluctuations. Foreign exchange market conditions constantly change, in real time, in response to both global and “conuntry-specific” events.

With non-stop access to global Forex dealers, the main enticement of currency dealing to private investors and attractions for short-term Forex trading is the the volatile markets offering enormous profit opportunities. Also worth mentioning are the ability to profit in rising or falling markets and the ability to “leverage” trades with low margin requirements.

The Forex market is purely speculative. No physical exchange of currencies ever takes place. All trades exist simply as computer entries and are netted out depending on the prevailing market price. For dollar-denominated accounts, all profits or losses are calculated in dollars and recorded as such on the trader’s account.

As to the specifics of buying and selling on Forex, it is important to note that currencies are always priced in pairs. All trades result in the simultaneous purchase of one currency and the sale of another. This necessitates a slightly different mode of thinking to which traditional equity traders are accustomed. The majority of Forex traders speculate in the most liquid currency pairs in the world, which are the four majors, EUR/USD (euro/dollar), USD/JPY (dollar/Japanese yen), GBP/USD (British pound/dollar), and USD/CHF (dollar/Swiss franc).