Foreign exchange, or forex, trading is an increasingly popular market for investors and speculators. The markets are huge and liquid, trading occurs on a 24-hour basis, and there is enormous leverage available to even a small individual trader. Moreover, it is opportunity to trade on the relative fortunes of countries and economies as opposed to the idiosyncrasies of companies. (For related reading, see The New World Of Emerging Market Currencies.)
Despite many attractive characteristics, the foreign exchange market is vast, complicated and ruthlessly competitive. Major banks, trading houses and funds dominate the market and quickly incorporate any new information into the prices. In fact, just 10 firms control about 75% of foreign exchange volume, and it is all but impossible for a currency trader to know who they are trading with at any particular moment.
To read the primer, follow this link:
http://www.investopedia.com/
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