Simply put, the Forex is the foreign exchange market. Its where travelers, banks, and companies that do business internationally change money, in effect buying one currency and selling another.
Profits are made from the difference in value between the two currencies (the exchange rate). Because currencies are no longer tied to the gold standard, exchange rates are constantly fluctuating. Speculators trade currencies with the expectation that one will gain in strength against the other. These trades are leveraged, with a small downpayment controlling a much larger sum, so even small changes in value can create large profits or losses.
The Forex is the mother of all markets, with trading of more than U.S. $1.5 trillion daily. Thats more than one hundred times the size of the New York Stock Exchange. Because the market is so large, its extremely liquid; theres always an immediate buyer or seller for any of the major currency pairs. Most of this trading is done for profit; only five percent of the trades made each day are for the purpose of changing currencies for business or travel.
The Forex market is also so large that it cannot be manipulated. Even powerful...
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