Forex is an abbreviation for Foreign Exchange Market. The Forex market’s daily turnover exceeds 4 trillion U.S. dollars and is constantly increasing. Forex is a global trading system, which includes banks, funds, institutional investors and speculators.

Generally, Forex trading is the simultaneous buying of one currency and selling of another. The majority of transactions are carried out in any of the major currencies: U.S. dollar, Swiss franc, Euro, Japanese yen, British pound, Australian dollar, and Canadian dollar. Transactions can be made electronically (via computer) or through a money market – an example of which is changing currency at an exchange desk. In both instances, we have a currency or Forex transaction.

Unlike other financial markets, Forex is not located at a designated place. Trading begins each day in New Zealand, followed by Sydney, Tokyo, London, New York, and California, and operates 24 hours a day through a network of computer terminals connecting banks, brokers, corporations, and individual investors trading with different quantities ranging from millions of dollars per transactions to thousands or hundreds of dollars for ordinary investors. This guarantees the formation of the so-called “market liquidity” or the capability to purchase or sell limitless exchange without restriction.

Technological advancements opened the Forex market to relatively small players who can purchase and sell currencies from their office or home.
At all times there are two prices in each currency transaction: take for example the price of EUR/USD, which would appear like this: 1.8000 / 1.8002. You would instantly notice that there are two prices. This is due to the exchange price quotations including both “Buy” and “Sell”:

Sell (Ask): The price at which the investors buy and dealer sells

Buy (Bid): The price at which the investors sell and dealer buys

The spread (Spread) is the difference between the buy and is the cost paid by the investor for the transaction. We offer a narrow range between “Buy” and “Sell”, thereby decreasing the cost of each transaction.

Currency pairs are quoted to four decimal places, e.g. USD/CHF – 1.3000/1.3003, the last digit is called a “pip”. For most currencies a pip is 0.0001 from the current rate, Japanese yen (JPY) being the exception as here the pip equals 0.01.

Investors base their decisions on both technical and fundamental analysis. Investors using the fundamental approach base their decisions on economic analyses, whereas technical analysis uses trend lines, mathematical models, support levels, charts, resistance, models, and other tools.