Forex – What is Forex Trading?
Benefits of Trading the Foreign Exchange (FX) Market
The Foreign exchange market otherwise known as “Forex” or “FX” is the world’s largest financial market with over 3.5 trillion USD traded daily.
There are three main reasons why businesses or individuals choose to participate in the FX market:
- To facilitate a transaction whereby payments are made for the export of goods or services by converting foreign currencies into their domestic currencies or the purchase of imported goods or services by exchanging local currency to purchase foreign currency.
- To mitigate unwanted risk of adverse exchange movements by hedging forward dated payments or receipts in the currency markets.
- To speculate for profit. It is estimated that more than 80% of all FX trading is speculative in nature.
Advantages of Trading Forex
- Ability to trade on margin.
Access to the FX market can be made using small capital outlays. Trade on margin with as little as 1% deposit.
- Trade long (open purchase) and short (open sale) positions.
- 24-hour seamless trading.
The FX market is open for a continual 5½ day peiod, from the opening of the New Zealand markets on Monday morning to the close of New York at 5pm on Friday evening. Real-time access to streaming prices is available at all times during this period (under normal market conditions).
- No delivery or contract expiry to consider.
- Benefit by trading the largest and most liquid market in the world.
The AxiTrader online dealing system is suitable for both technical and fundamental trading. It is flexible enough to accommodate your most demanding trading requirements over a wide range of foreign currency pairs and commodities.