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Principally the market exists to enable banks, businesses and governments to protect themselves from adverse fluctuations in currency values thereby enabling them to manage their risk in international currency trading. The majority of the trading is between 300 large international banks which process transactions for large companies and governments and for their own accounts.

However, there is also the “speculator” segment in the Forex market. Speculator traders and investors invest money to buy and sell foreign currencies to profit and take advantage from the constant price fluctuation of foreign currencies.

Forex trading is not bound to any one floor or specific market and are done electronically between a network of banks continuously over a 24 hour period. There is no regulated exchange and no centralized location for trading activity and trading occurs over the Internet at locations worldwide, and as a result of this, there are additional risks involved in this type of trading which potential traders should be aware of.

The advent of the internet has opened a whole new world for the small investor like yourself, allowing you to trade this profitable market place from the comfort of your home or office. All trades are calculated on very sophisticated trading software systems and finally executed via a designated, 24-hour dealing desk.

How to get started:

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Geared Trading

Gearing allows you to control much more money than you have available in your account. This allows for much larger profits and of course losses.

Margin

The margin deposit is not a down payment on a purchase of equity, as many perceive margins to be in the stock markets. Rather, the margin is a performance bond, or good faith deposit, to ensure against trading losses. The margin requirement allows traders to hold a position much larger than the account value. The online trading platform has margin management capabilities, which allow for this high leverage. The trading platform performs an automatic pre-deal check for margin availability, and will only execute the deal if the client has sufficient margin funds in his or her account.

In the event that funds in the account fall below margin requirements, the trading platform will close all open positions. This prevents clients' accounts from falling below the available equity even in a highly volatile, fast moving market.