What is the Forex Market?

The Forex market (Foreign exchange Market) is the market in which currencies are bought and sold. For example, a market participant is able to receive Australian dollars by paying a specified amount of US dollars. In effect the trader has bought Australian dollars and sold US dollars. The prices of currencies that are set in the market are determined by the amounts that buyers and sellers are willing to pay. For example if there are more participants in the market that want to buy Australian dollars than want to sell Australian dollars at a specific price than the price of the Australian dollar will rise until it reaches a price where there is an equal amount of participants willing to buy and sell at the same price. Profits can be made in the Forex market due to moves in the prices of currencies. The idea is; if you were to buy a currency at a lower price than you sell it for, you have made a profit equal to the difference in the two prices. This is made possible by the simple fact that the price of the currency has changed. If the prices of currencies are changing by large amounts and are doing so often, ie. the market is volatile, than there exists greater potential for higher profits to be made. The Forex market is recognized as one of the most volatile markets in the world.

To find out more, go to www.forexct.com