FOREX, popularly known as Foreign Exchange Market, refers to an international exchange market wherein currencies are purchased and sold. The Foreign Exchange Market that is seen today started in the 1970's, when free exchange rates and floating currencies were established. In such an atmosphere, only participants in the market decide on the rate of one currency against another, depending upon the supply and demand of that currency.
The concept of best Forex trading differs from investor to investor, as human judgment is influenced by temperament and emotions. Hence different features of FOREX trading appeal to them. FOREX is a unique market for several reasons. First of all, some investors find FOREX as the best trading market because it is one of the markets that it is devoid of external controls and that cannot be influenced.
It is also the major liquid money market, with trading between 1 and 1.5 trillion US dollars every day. With so much money moving so fast, it is understood why a single investor would find it nearly impossible to drastically affect the price of a major currency. Some other investors find currency trading the best because the liquidity of the market implies that unlike some infrequently traded stock, traders are able to open and close positions within a few seconds as there are constantly willing buyers and sellers.
Another rather distinguishing feature of the FOREX market that appeals to investors is the variance of its participants. Investors have numerous reasons to enter the market. Some enter as long-term hedge investors, while some use huge credit lines to look for large short-term profits.
Dealings in the FOREX market are not centralized and therefore take place by means of telecommunications. FOREX trading is open 24 hours a day from Sunday to Friday afternoon.
Marginal trading is merely the expression used for trading with borrowed capital.
For some investors, this factor proves to be an appealing one because in FOREX, investments can be made without a real currency supply.