Global Currencies

1. What is Forex?

Forex; an overview

The foreign exchange market is the world’s biggest financial market regularly experiencing daily transaction volumes in the trillions of dollars. Depending on which currency we may favour or possess, each of us already automatically plays a role as investors in this mammoth global market.

The Forex market; as it is most commonly known, is a financial market which operates globally. Unlike the stock market, Forex is not located in a central location. Instead, trading occurs via electronic networks of banks, traders, speculators and financial institutions throughout the world. Forex is the most liquid financial market in the world and operates 24 hours a day. Trading occurs at all times of the day and night, beginning and ending with the open and close of each of the world’s major financial hubs’ daily trading sessions.

The Eight Major World Currencies are as follows:

1. Japanese Yen
2. New Zealand Dollar
3. Australian Dollar
4. Euro

5. Swiss Franc
6. English Pound
7. United States Dollar
8. Canadian Dollar

Originally, Forex was restricted to major banks and financial institutions. However, with the development of technology and growing ubiquity of the internet as well as the attraction of high levels of leverage (which increases chances of profit as well as loss), Forex is now available to regular individual investors.

If you have access to a PC with an internet connection, participation in this dynamic and exciting global trading market is easy. It is possible for you to start your new account at CMS Forex with a low initial deposit of US$200.

If you are not sure or are unfamiliar with the foreign exchange market, you can also open a practice account for a test run. This does not involve any money or risk. All you have to do is to fill out a form and you will be given a username through which you will be able to download the award winning software MetaTrader 4.

Feel free to continue reading for more information on how forex trading works or you can skip ahead by clicking on Next Page here.

Risk Warning

Before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose.

There is considerable exposure to risk in any off-exchange foreign exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair.

More over, the leveraged nature of forex trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin requirement, your position may be liquidated and you will be responsible for any resulting losses. To manage exposure, employ risk-reducing strategies such as 'stop-loss' or 'limit' orders.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Forex.com/UK acts as the clearing agent and counterparty to customers introduced by "Global Currencies" for an IB margined forex transactions. FOREX.com is a trading name of GAIN Capital - FOREX.com UK Limited and is authorised and regulated by the Financial Services Authority. FSA No. 190864.