What is Forex Currency Pairs

The foreign exchange or the forex market is accepted as the most active and liquid financial markets in the world. Global daily forex turnover is estimated to be over $1.7 trillion. The spot forex market is an over-the-counter market and is different from exchange-traded products because it has no physical location or central exchange. Foreign exchange trading takes place in the world major financial trading centers with the main centers being London, New York and Tokyo.

Trading hours are rarely restricted and prices are typically available in the major currency pairs almost without interruption during the working week. This liquidity and frequent volatility makes the trading of currencies an attractive investment opportunity for the experienced market participant.

Forex trading has many investment benefits some of which are:

• Liquidity-With over one trillion US dollars traded daily in the Forex market and with millions of participants and transactions daily, there is always the opportunity to enter and exit the market at transparent pricing.
• 24 hr trading-The market operates around the clock, from the Sydney market on Monday morning to the close of the US market on Friday creating a 24 hour market. One of the biggest advantages of trading forex is the opportunity to trade 24 hours a day. This enables traders to react and take advantage of market movements at all times.
• Increase in leverage -Leveraged trading, also referred to as margin trading, allow investors in the Forex market to execute trades up to $100,000 with an initial margin of only $1,000.
• Predictable market - The Forex market follows frequently repeated trends. Currency markets exhibit certain regularities, creating price trends for market participants to follow. These price trends increase the chances of trading profitably.
• Lower transaction costs

Forex market is much more cost efficient to invest in terms of both commissions and transaction fees. In general, the width of the spread in a FX transaction is less than 1/10 as wide as a stock transaction. Profit from all market movements - With forex, the market is continuously moving, so there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. Thus, a trader has the ability to profit on both short and long trading strategies.