Foreign exchange, more commonly known as Forex or FX, relates to buying and selling currencies with the purpose of making profit off the changes in their value. As the biggest market in the world by far, larger than the stock market or any other, there is high liquidity in the forex market. An estimated 5 trillion USD is traded daily, most of it speculative.

Without knowing it, you have probably already participated in the foreign exchange market by ordering imported shoes, or more obviously, buying foreign currency when on vacation. Traders are drawn to forex for several reasons, including:

• The size of the FX market

• A wide variety of currencies to trade

• Differing levels of volatility

• Low transaction costs

• 24 hour a day trading during the week

The forex market is the world’s largest financial market, and since trading is between market participants, there is no “open” or “close” of market except on weekends. In other words, forex trading occurs from Monday morning in New Zealand until midnight Friday on the west coast of the USA. You might enjoy trading the major currency pairs, or have knowledge about the strength of an exotic currency, or a feel for commodities; some opportunities present themselves to people who keep up with news and events, while others require patient analysis.