A quality the FOREX holds in contrary to other financial markets is the possibility of buying or selling an unlimited amount of currency, supplied that you have the required funds for it. Unlike the stocks market in FOREX there isn’t such a thing as an “inside tip”. No one will prosecute you for “insider trading” since there isn’t such thing in the FOREX market. Furthermore, traders and investors use economic reports, charts, employment figures and financial forecasts to predict currency movements and trends, and so if you heard a hot tip, a based one, go for it and collect your profit. To sum things up on a bright note, the Foreign Exchange market is the largest financial market in the globe, growing every day with more than $1.5 trillion changing hands everyday, a fact which gives you endless opportunities to increase your funds.

What is actually being traded in the FOREX market? In one word? Air. There isn’t any material exchange as the exchange takes place over the Internet. The FOREX market came as a solution to multinational corporation and governments' need to trade currencies continually for closing internationals deals. Today the multinational corporations' needs represent only about 20% of the FOREX market while the other 80% are large monetary institutions, hedge fund companies and individuals traders. Currencies are always traded in pairs, so basically you are investing in two currencies' ratio. Understanding that fact can simplify the explanation that when investing in a certain pair, the investment will always long one currency and short the other one. To emphasize what the meaning of going long or going short, here is an everyday and physical example: If you went into a CD store and purchased a CD for $10, by doing that you are basically exchanging your dollars for a CD. You would be "short" $10 and "long" 1 CD. The store would be "long" $10 but now "short" 1 CD in its supply. This is the basic idea behind FOREX trading.

Which currencies are traded on FOREX? The US dollar is the most frequently traded currency in almost 90% of all trades, followed by the Euro with 38% of all trades, the yen with 20% of all trades and the pound with 17% of all trades. The leading currency has nothing to do with the currency ratio; it is a permanent arrangement made by the commercial banks that goes to simplify the form of speech for FOREX traders. There are seven major currency pairs which are the most liquid currency pairs in the world (EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD and NZD/USD), those currency combinations cover around 95% of all FOREX trades. Do I pay any commissions while trading on FOREX? Same as the stocks market have brokers, in FOREX there are both dealers and firms who take the traders' order and implement them on the market according to the client's directions.

Unlike the stock market, the FOREX market is a principals-only market and therefore does not have any commissions. FOREX dealers are not brokers - unlike brokers, dealers serve as a counterpart to the investor's trade. Don’t worry, your FOREX dealer does bring some food home, FOREX dealers make their profits off of the bid/ask spread, aka pip (Pip= percentage in point, it’s the smallest rise of a change in price) without any additional fees or commissions. What is the meaning of “carry” in FOREX? When traders taking about pulling the “carry” they mean using a FOREX trading strategy that take action when an investor sells a currency with a rather low interest rate to buy another currency yielding a higher interest rate. The carry is a common and popular trading system; by using the carry strategy the trader basically try to capture the gap between the rates What should I do before starting to trade on the FOREX? It is highly recommend that you study the lingo used in the FOREX world, by reading and comprehending a FOREX glossary. Take you time and study the market - choose the currency you’ll invest in and go as far as learning that specific country's economy. Do your homework and then open a FOREX demo account. It is very important to study the market from all possible aspects, and by using a demo account you can acquire skills that on the real FOREX can gain you some big bucks. After some training, when you feel you have learned as much as necessary, it is strongly suggested that you start by opening a mini-lot - as good as the demo accounts is for practicing, they aren’t the real deal.