Until the late 1990's, large financial institutions dominated the Forex market. Over the last several years the market has witnessed a dramatic evolution, with independent firms offering direct access to the forex market via internet-enabled trading platforms. Savvy individual investors are now tapping into the FX market's significant profit potential, with access to the same pricing, market data and tools used by institutions, hedge funds and professional traders.
In some ways, Forex is very similar to other financial markets. For example, Forex is traded with recognizable patterns and clearly-defined technical applications, comparable to those found in stock trading. But the real advantages of Forex trading are obvious in the market's unique features. Forex attracts so much investor interest due to the many advantages not found in other financial markets, such as:
Greater Buying Power - Many forex brokers offer up to 200:1 leverage, much higher than the standard 2:1 leverage granted by equity brokers.
24-hour Trading Activity - In the forex market, traders can respond to breaking news immediately, day and night. Since currencies are traded worldwide, 24 hours a day, they are not vulnerable to after hours reports and value loss.
Superior Liquidity - With almost $2 trillion in daily transactions, Forex is the largest and most liquid market in the world. The sheer volume of this market helps ensure price stability and the execution of orders are fair market prices.
Ultimately, investors from equities, futures, and other financial markets are lured to forex trading by the market's superior liquidity, lower transaction costs, and 24-hour access.
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