Forex Overview

Basics of the Forex Market

1. What is Forex?

www.cmsfx.comWhether or not you are aware of it, you already play a role in currency trading. The simple fact that you have money in your pocket makes you an investor in a nation's currency. By holding US Dollars, for example, you have elected not to hold the currencies of other nations. When a currency is traded, the transaction is carried out on the Foreign Exchange market (also referred to as the Forex or FX market). The Forex market is the largest financial market in the world, with over $1.9 trillion changing hands every day!

Unlike other financial markets that operate at a centralized location (i.e., the stock exchange), the worldwide Forex market does not have a central location. It is a global electronic network of banks, financial institutions and individual Forex traders, all involved in the buying and selling of national currencies. A major feature of the Forex market is that it operates continuously six days a week from its opening session on Sunday afternoon (Eastern Time) to Friday afternoon (Eastern Time). Throughout this period, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.

What is Forex? Traditionally, access to the Forex market has been made available only to banks and other large financial institutions. However, with advances in technology over the years along with the industry's high leverage options, the Forex market is now available to money managers and individual Forex traders.†

With some initial capital (as low as $25 with CMS Forex), and a computer with an internet connection you can become a participant in this global and liquid financial market.

Or, you can test the market with a practice account that does not involve real money. Just fill out a simple form here to receive a username, after which you will be prompted to download VT Trader, our trading software.

This Forex Overview continues with a quick, but detailed explanation of how forex trading works. You can continue by clicking on Next Page or use the navigation on the top of this page to skip ahead.

If you are looking for a more robust educational resource, please visit our Online Forex Course.

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† Increasing leverage increases gains as well as losses on any given trade. Forex is an over-the-counter (OTC) or off-exchange market.