Introduction To Foreign Exchange

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Introduction

The Foreign Exchange Market technically began in 1971 when the system of fixed exchange rates was abolished. Today it’s the largest marketplace in the world. Daily turnover is roughly $1.5 Trillion per day, 100 times greater than the New York Stock Exchange (about $15 Billion per day).

You’re probably wondering why the press makes so much noise about stocks and barely mentions foreign exchange. The answer is the trading in the major currencies (U.S. Dollar, Euro, British Pound, Yen, and Swiss Franc) is boring by Wall Street’s standards. Most days the dollar moves up or down less than 1%. On exciting days less than 2%. It’s simply not newsworthy.

Foreign exchange trading has always been a high return low risk business. Up until recently the banks were the main beneficiaries. Nobody in the investment community cared about 2% FX moves when Wall Street was flying high. Things are different today. Interest in trading and investing in currencies has never been greater. Best of all, thanks to the Internet and technology small investors can get in on the action too.

There are many reputable online FX brokers for those of you making your own trading decisions and a growing number of professional currency traders that offer their services for a share of the profits.