Forex: What is All the Hype About?

By: Kristi Ambrose

The main point (if you choose to get into it) is that Forex is all about making money. Most investors will tell you that it's easy to make money, but for the most part people will tell you it's actually quite hard and it takes some good knowledge, a lot of practice, and be smart! Forex is the Foreign Exchange Market which is a market is where currency trading takes place. FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another.

You will find people talking about this word, Forex, both online and offline because it is a very popular way of people making money, or trying to make money from. Forex trading takes place through a broker or a fiscal establishment frequently where you are able to purchase other kinds of stocks, bonds and investment funds. When you are thinking getting involved in the forex markets you should know you are sending money to be invested with other countries.

This is done to prop up the investments of individuals involved in certain types of hedge funds, and in the markets offshore. Your money has the potential to be moved around a lot so you should expect that even though it's in one country today it may be in another country tomorrow. This is normal but the changes are determined by your broker. If you get a hold of your statement (which you should) you will notice that each type of currency has a three letter acronym to represent that currency from that country. For instance:

USD - United States Dollars

JPY - Japanese Yen

GBP - British Pound Sterling

You also might see some other weird letters in your account statement for example: GBPzzz/JPYzzz this simply means that you took your British pounds and invested it into something in the Japanese market!

The only real people you can trust with your money and your investment are the firms and companies that deal with your initial investments. You want to really make sure you find a firm or a company that has been doing forex for a while and not someone that just walked the corner and says "okay I'll help you". You are going to be giving this person your money, you need to make sure they are absolutely responsible and you can trust them and they will do the best they can with your investment money.

It is important that you beware of companies that are popping up online, and often times from foreign countries that are stating they can get you involved in the forex markets and trading. Read the fine print, and know whom you are dealing with for the best possible protection. As with most other investments online you will find that there are limits to which you can invest. Sometimes you might be asked to invest a few hundred whereas with other companies you will need thousands or hundreds of thousands of dollars.

The scams that are online will tell you that you only need a $1 or $5 to open an account, but you need to learn more about that company and where they are doing business before investing any money, this is for your own protection while dealing in forex trading and markets online.