Commodity Forex Online Trading is the largest financial transactions market in the world and covers volumes of approximately 2 billion dollars a day. It is the core of what was initially known as the currency market, also known as FX, Spot FX or simply Spot.
How big is Commodity Forex Online Trading? Well, if you consider that the trading volume of the New York Stock Exchange is "only" 25 billion per day, then you will realize how big the Forex Trading commodity market really is! In fact, it is three times bigger than stocks and futures markets combined! Now how big is that!
But what is it that Forex traders trade in the forex market? The answer to that question is simple: Money! Forex Trading is the act of trading one currency against another. A trader may decide to sell some of the US dollars he owns and buy Japanese yen. This simultaneous exchange of currencies is, therefore, the core of Commodity Forex Online Trading. Because two treaties must be involved in any trade, they are called pairs. For example, the euro dollar and the US dollar (EUR / USD) or the pound sterling and the Japanese yen (GBP / JPY).
In the old days, when the barter economy formed the basis of daily exchanges, the value of a product was estimated in comparison with that of another, and a trade based on that estimate was made. This analogy is still valid for the Forex online commodities trading market, with the difference that the estimation of one currency with respect to the other is based on the global market value of these currencies and not on the estimate of a few individuals.
Commodity Forex Online Trading actually means that when one currency is sold to make way for another, the forex trader actually invests in the country's economy, the currency he is buying, and in doing so, effectively buys a "share" in the economy from that country. In our example, an operator that buys Japanese Yens does so in anticipation of the market valuation of the current and future health of Japan's economy.
All things considered equal, the exchange rate of one currency against the other reflects the condition of the economy of each country. The economy of a country is dictated by internal and external forces, such as war, drought, political stability, civil unrest, etc. The flow of treaties from one country to another results in a large part of such events.
Commodity Forex's online trading market is different from any other financial market, not only because of its size but also because it has a physical location or a central exchange, unlike the New York Stock Exchange, for example. As such, Forex Trading is considered an OTC market in the sense that it has no limits and is independent of any central bank or institution. In short, Commodity Forex Online Trading is executed electronically through a giant network of computers. Within a network of banks, continuously, 24 hours a day.
Before the late 1990s, Forex Trading was only available to large players who had to have an initial working capital of millions of US dollars before they could trade. In large part, the only domain of bankers and large financial institutions, had no place for the little one. The Internet boom has been such that Commodity Forex Online Trading companies can now offer retail accounts to smaller retailers.
These small and often inexperienced traders can quickly become experts in the Commodity Forex Online Trading business by using an expert forex trading software such as Forex Killer.