Forex trading is a form of betting on the foreign exchange markets (Forex) between currencies. Forex traders buy one currency and trade it against another one, hoping that the one that they have bought will become more valuable than the other one. Forex traders use a Forex trading platform provided by their broker to facilitate their buying and selling activities.
Forex trading has only recently been opened up to individuals as it was previously the domain of banks, lenders and fund managers but now it is open to everyone. Having said that, individuals are not permitted to buy and sell currency directly but instead must go via a broker who will buy and sell on their behalf. Brokers must be licensed, either by the FSA or another regulatory body.
The market has become very popular for individuals despite this restriction, because the returns can be very high, and because the market tends to be less volatile than the stock market. Currencies are generally more stable than commodities, particularly now so few of them are tied to the gold standard.
The market operates 24 hours a day and so it is important that new traders have an idea of what the signals to look out for which can indicate that a currency may move. There are a number of different Forex trading systems available online and it is useful to review these before starting to trade. Many Forex platforms allow new traders to operate a dummy trial account before they actually commit any cash.
