If you've ever traveled to another country, you usually had to find a currency exchange booth at the airport, and then exchange the money you have in your wallet. When you do this, you've essentially participated in the forex market! The foreign exchange market, which is usually known as "forex" or "FX," is the largest financial market in the world. Compared to the measly $74 billion a day volume of the New York Stock Exchange, the foreign exchange market looks absolutely ginormous with its $4 TRILLION a day trade volume. Check out the graph of the average daily trading volume for the forex market, New York Stock Exchange, Tokyo Stock Exchange, and London Stock Exchange. The currency market is over 53 times BIGGER! The Forex market is always liquid and trades 24 hours a day unlike the 6.5 hours of the stock market. You are able to set your own hours instead of following stock market hours. Also Forex is unlikely to gap up or down which can cause huge draw downs. Many systems can be implemented into Forex because the price action is very predictable and trends very well. Unlike the over +2000 stocks, you can only focus on the main pairs of the Forex which makes life much easier. Sure there are other markets out there, but Forex probably provides the best liquidity and is less risky considering we don't abuse the leverage involved with Forex. We will get into leverage in another article.
Remember we are traders and masters of risk!
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