Foreign currency exchange market is one of the most active financial markets. For the five working days every week, this market is open for 24 hours, giving opportunities to investors to react in real time to news and signals. The liquidity of assets in this market is quite high, while the costs of transactions are typically lower than for other actively traded asset classes. Like many other markets, the possibility of earning profits exists regardless of whether the asset price is falling or rising.
- In the world of forex, the high liquidity means large amounts of money can be moved into and out of currencies with generally small spreads.
- The cost of a transaction is typically built into the price in the forex market in the form of the spread. Forex brokers pocket the spread as their payment for facilitating the trade.
- Forex brokers often allow traders to buy and sell in the market using significant amounts of leverage, which gives them the ability to trade with higher amounts of money.
“The forex market is worldwide, so trading is pretty much continuous as long as there’s a market open somewhere in the world.”