Possibly the most appealing point about this form of trading (for those involved in it) is the fact it goes on 24 hours a day. The day could be ending for someone trading on the New York exchange but in Tokyo a new day is only beginning and our US trader would only have to switch exchanges to carry on trading around the clock.
This market is often referred to as the foreign exchange, currency market, forex or FX market and is active anywhere one currency is traded for another and includes trading between large banks, central banks, currency speculators, multinational corporations, governments and other financial markets and institutions. Individuals or retail traders as they are known in the market may not trade directly themselves as they must participate indirectly through brokers or banks and they are by far the smallest sector of this massive market.
Because of the size of this market and because there are no limitations made on what currencies you have to trade, it appeals to many people to want to get involved in this form of trading. Over and above this one can make money when trading on currencies that are gaining in value and make money on falling currencies too. Add to the fact that when trading through brokerages you will be allowed to trade in amounts equal to ten times the amount of money you have on deposit that is to say if one has $1000 on deposit you can trade in amounts up to $10,000 and profit on that as if your were investing $10,000. To show you this point more clearly: if you made a 1% (and this is a much exaggerated example), you could make a $100 gain on your $1000 on deposit. Add all these benefits together and many people think they are into a money making machine. However, be careful because all trades must be finalized at the end of trading each after each trading period and one cant lose their $1000 one day and be able to carry the loss over to the next day in the hope of turning things around.
The other point that appeals to so many people is the fact one does not have to trade for hours on end each day because the currencies are always moving up or down against some other currencies. However, the point to remember is that one really is playing against other traders and so you will always have winners and losers in this game of currency exchange. Many believe there is a fortune to be made for the individual in this form of making money and for a very small percentage of those involved there is and they do make a fortune.
One could say with the advent of the Internet currency exchange has become the gold rush of our times for the individual and that is true in more ways than one. You see the ones who really made money in the gold rush were not the miners but those who supported the miners by supplying them with the tools, food, recreation and all else that is needed to fuel a boom of that nature.
The real winners of the currency exchange will be the businesses supporting the individual currency traders including people offering advice and even training people to become traders in this booming market, not the traders themselves because over 90% of them will fall by the wayside.
Michael Russell Your Independent guide to Currency Exchange