Forex is short for the Foreign Exchange Market; at a daily $3 trillion in turnovers, it is without exaggeration, the largest financial market in the world.

Why is it so big? Well, since forex is a worldwide exchange of currencies, the biggest participators in the trades are the banks and institutions who conduct 95% of the transactions. A miniscule 5% of the transactions are done by the private traders with the guts to analyze forex trading and compete, toe-to-toe with the big banks.

Here are some forex facts that might be useful if you’re planning on joining that brave 5%:

• However big the Foreign Exchange Market is, like all financial markets, it follows one basic rule. Like all markets, the objective is to sell high and buy low. That’s basically how you make money in this industry.

• There are 2 main ways to trade in the Foreign Exchange Market. The 1st is reactive trading. This means basing trade decisions on recent developments in the market. Reactive trading is popular among private traders who have proven it a profitable forex trading strategy.

• The 2nd method is speculative trading. This means basing transactions on speculations of how the market moves. This also means keeping up with anything else that might affect market shift. Literally anything: world events, catastrophes, political shifts and overturns, scientific advancement, etc. Remember the saying “Money makes the world go round”? That saying should come with a vice versa. World currencies shift with the world. Speculative trading is knowing when and how to shift with it.

• Besides being the largest financial market, the Foreign Exchange Market is also the most liquid. Financial liquidity means the ability of an asset to be exchanged with another asset without losing market value or depreciating in any way. This aspect of forex is one of the first discussed in any forex trading system.

Currency, or legal tender is the most liquid asset, as its value is always the same no matter what it is exchanged for. Forex is a market with its foundations set in world currencies –thus it is the most liquid market. Understanding liquidity and applying that understanding to trading is a leap towards higher profits from forex.

• A way to maximize the time you spend trading is trading during the right times. The right times means the most active times of the market. As the Foreign Exchange Market trades currencies from all over the world, it operates 24 hours a day and 5 days a week.

Depending on where you are from and what currencies you are trading, there are peak hours when trading is the most active. Maximizing your trading time means trading during the peak hours of your traded currency, and of the market.

• People trade in forex for different reasons. Those obsessed with finding the perfect forex trading system are seeking their fortune, looking to the forex market for financial security and independence.

Others are looking for a more convenient form of income in the form of online forex trading. Some are even in it just for the thrill of it. Whatever the reason may be, they all want one thing: Profit. That’s all the reason you need in deciding whether to get into forex or not.