On one side of each speculative stock trade is a participant who believes he
has superior information and on the other side is another participant who
believes his information is superior.
For speculators, the best trading opportunities are with the most commonly
traded (and therefore most liquid- meaning its in cash or convertible to cash)
currencies, called "the Majors." Today, more than 85% of all daily transactions
involve trading of the Majors.
A true 24-hour market, Forex
trading begins each day in Sydney, and moves around the globe as the business
day begins in each financial center, first to Tokyo, London, and New York.
Unlike any other financial market, investors can respond to currency
fluctuations caused by economic, social and political events at the time they
occur - real time- day or night.
The Forex market is considered an
Over The Counter (OTC) or 'interbank' market. This is because the transactions
are conducted between two counterparts over the telephone or via an electronic
network. Trading is not centralized on an exchange compared to stocks and
futures markets.
