Forex market also referred to as FX market is the largest financial market in the world. The FX market is open 24 hours a day and at any point of time, at least one business center remains open for trading.

Forex trading can be an important source of income for your household especially when everyone is reeling under recession. It has served as a passive source of income for many traders in the forex market. This is an effective means of earning especially during recession when most of the companies are cutting costs and downsizing their workforce. Since the forex market is not influenced by a single country, industry or government, it has an edge over other forms of trading. If you are trading currencies, there are 3 factors that need to be taken into account and these factors will determine your success. They are as follows –

• Your capacity to take on risks
• Aim of your investment portfolio
• How much experience you have in forex trading

What gives forex trading an edge over other trading forms?

• You can start trading with currencies with a very small cash amount.
• Currencies are traded in pairs so if the value of one currency drops, the value of the other currency increases.
• It is regarded as a very liquid market and the chances of earning profit are very high.

You can take help of a forex broker if you want to be guided in forex trading. It is better to take help of an experienced and reliable forex broker who will be able to guide you properly. Few forex brokers also have their websites and offer extensive information on forex trading.

When you trade currencies in FX market, you trade a pair of currencies simultaneously. While one currency is sold, the other is bought. Usually the following currencies are traded in the forex market.

• United States Dollar or USD
• Euro or EUR
• Japanese Yen or JPY
• British Pound or GBP
• New Zealand Dollar or NZD
• Australian Dollar or AUD
• Swiss Franc or CHF
• Canadian Dollar or CAD

Currency pairs that are traded in the forex market

• Major crosses- that include EUR/CHF, EUR.JPY, EUR/GBP
• Majors- that include EUR/USD (Euro-Dollar), GBP/USD, USD/CHF, USD/JPY
• Dollar bloc- that include NZD/USD, USD/CAD, AUD/USD