Forex trading is the practise of trading pairs of currencies. One might, for example, buy the British pound whilst selling the US dollar at the same time, making a currency pair of the two. Forex is an acronym of Foreign Exchange, and is a practise which has been around in one form or another for many millennia. Those not familiar with Forex trading may wonder why this form of trading has become so popular in recent years. There are several reasons for this.

Since the early 2000s, financial trading methods have become more and more accessible to a wider proportion of the general public. The advent of such practices as Contracts for Difference trading (CFD trading) meant that a trader would only require a small initial deposit to get involved in the financial markets. Over the course of several years, CFD trading, spread betting and Forex trading became more well known.

One of the main attractions of Forex trading is that it is a leveraged product. This means that a trader needs to only put down a proportion of the value of the trade, usually between 5 and 10%. So £200 actual pounds can be worth as much as £2000 whilst trading. Hence, profits can be many times the size of the investment. The drawback to leveraged products is, however, that losses can likewise be many times greater than investments, a fact those Forex trading should bear in mind.

At the same time, the fact that the Forex markets are accessible around the clock is another reason why Forex trading is popular. Currencies are always in high demand, which is why the markets never stop. The international nature of Forex trading means that there will always be Forex traders ready to trade somewhere in the world.  As such, traders can choose when they wish to trade, and can trade from home if they so desire. This suits those who may already have full time jobs or other commitments.

There is another reason why Forex trading is popular. As the Forex trading markets offers a narrower choice of trades than other markets, traders spend less time carrying out trade analysis. This means traders are more able to identify great opportunities than on other markets. Well-informed traders are thus best-placed to make profits from investments if they keep their eyes on the market.

Overall, the accessibility of the Forex trading market, its flexibility and the ease with which clued-up traders can make a profit are all reasons why this method of trading has become so popular.