Forex trading is not bound to any one floor or specific market and is done electronically between networks of banks continuously over a 24-hour period. There is no centralized location for trading activity and trading occurs over the Internet at locations worldwide. Forex trading is not conducted on a regulated exchange and as a result there are additional risks associated with this type of trading which should be considered before entering this market.
The advent of the Internet has opened a whole new world for the small investor allowing him to trade this profitable market place from the comfort of his dwelling or office. All trades are calculated on very sophisticated trading software systems and finally executed via a designated dealing desk.
The forex market is called an 'Interbank' market due to the fact that historically it has been dominated by banks, including central banks, commercial banks, and investment banks. However, the percentage of other market participants is rapidly growing, and now includes large multinational corporations, global money managers, registered dealers, international money brokers, futures and options traders, and private speculators.
The most often traded or 'liquid' currencies are those of countries with stable governments, respected central banks, and low inflation. Today, over 85% of all daily transactions involve trading of the major currencies, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and the Australian Dollar
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