What is FX. FX or foreign exchange trading is also known as forex or currency trading involves the trading of various foreign currencies around the world. Its the largest marketplace by far, which guarantees a massive amount of liquidity to forex traders. The typical daily turnover in worldwide foreign currency exchange markets can be approximated in excess of $ $3.98 trillion, when you compare the New York Stock Market which usually trades a typical $150 billion daily you can start to discover exactly how enormous the forex market actually is. The city of London is the biggest trading market in the world followed by the US markets.

To answer the question What is FX. It is best explained in the following video clips.

What is FX Trading ?

There isnt any central exchange similar to futures, and the majority of the trading is conducted electronically. The big boy’s within this game are the Banking institutions, Hedge Funds and financial organisations. Nevertheless, due to new regulations as well as introduction of  Forex Trading Platforms over the internet just about anybody is now able to begin trading foreign currencies.

When trading, the currencies are traded in pairs. One currency is bought and the other sold. The major currency pairs in the forex market are the US Dollar (USD) Japanese Yen (JPY) the Euro (EUR)   the British Pound (GBP) Canadian Dollar (CAD) Swiss Franc (CHF) and the Australian Dollar (AUD)

Forex trading is superior to trading stocks in many ways. Foreign currency prices are usually not greatly influenced by institutional investors. In stock trading, we have a limited level of volume each day. Every stock has a certain volume of shares on the open market and the stock price is dictated as a result of the number of individuals wanting to sell or buy shares at a certain moment in time.

Foreign currency trading is available twenty-four hours a day. With the stock market, you may trade from Monday through Friday when the exchange is open. When an important news story breaks while you are holding a stock, and it is after hours, you are left holding onto your position till the marketplace reopens the following day.

Another great advantage of forex trading is that you can profit in up or down markets, it is actually as acceptable to trade on the down side as it is to the upside.   You can be “Short” or “Long” on any currency pair.

Just like any other investment, forex trading does have its risks as it is a leveraged product.  While large profits can be huge so can the losses. There are always risks involved in trading any kind of stocks, futures, option,  bonds or currencies and you need to be aware of this before you begin.

If you are asking the question, What is FX then you need to study currency trading before you begin to trade.