The foreign exchange market is the largest financial market in the world, which makes it extremely attractive to investors of all kinds – especially ones who are smart about their finances and switched on to global trends. In this article we’re going to look at what this exciting market is and how you can get involved.
What is the Foreign Exchange Market?
As its name implies, the foreign exchange market is the market in which traders buy, sell, exchange and speculate on currencies. Also called the forex, FX or currency market, the foreign exchange market provides extremely high liquidity – which means that the trading volume is high and therefore assets can be bought and sold easily.
A Market That Doesn’t Sleep
Another benefit of the foreign exchange market is that it is open 24 hours a day, 5 days a week. When one major forex market closes, another opens, giving you the convenience of trading when you want.
Investing in the Foreign Exchange Market
If you’re interested in FX investment, it’s worth looking into starting a trading account. Ideally, you should choose an online broker which offers good customer service and a trusted forex trading platform. You should also look out for interactive FX trading courses, which can help you to learn how to analyse and trade like a more advanced investor.
Qualities of a Forex Trader
If you’re wondering if forex trading is for you, it might be worth studying this list we have compiled of the attributes which are typical of FX traders. Typically, as a forex trader, you would be:
- Diligent, in that you are careful and persistent enough to follow through on a strategy.
- Experienced, in that you understand how many of the world’s currencies interact.
- Patient, in that although this is a fast-moving market, you will often have to wait for your strategies to come to fruition.
- Smart, in that you have to be switched-on and ahead of the pack if you really want to take advantage of opportunities.
- Resilient, in that sometimes your trading strategies won’t pay off and you will need to pick yourself up and try again.
Investing Beyond Borders
One of the main requirements of participation in the forex market is that it calls on you to think internationally. So, if you’re the type of person who is fascinated by foreign countries and currencies, and can see opportunities in them, then this form of investment might be perfect for you.