INFX Trading is a privately held primary foreign currency trading market maker. INFX is providing online forex trading services to clients from around the globe, including fund managers, individual traders and other fx market participants. Our goal is and will always be to make it possible for our clients to succeed in a challenging world of online forex trading.

Forex Market and Forex Training

In terms of trading volume, daily foreign currency trading market turnover exceeds $1.6 trillion US dollars (source: Bank of International Settlements). This makes the foreign currency trading market the world's largest, most efficient market, dwarfing both the US bond and equity markets. The New York Stock Exchange, for example, has a daily trading volume of approximately $30 billion. In turn, the fx market is by far the most liquid market in the world today. Due to the sheer size of the forex market, it is virtually impossible for individuals or companies to impact exchange rates. In fact, even central banks and governments find it increasingly difficult to affect the exchange rates of the most liquid currencies, such as the US dollar, Japanese Yen, Euro, Swiss Franc, British Pound and Australian Dollar due to the volume in the foreign currency trading market today.

The foreign currency trading market was established in 1971 when floating exchange rates began to materialize. It is an "interbank" or "interdealer" market based on the vast network of hundreds of major banks across the globe. Additionally, it is an Over-The-Counter (OTC) market, meaning that transactions are conducted between any counter parties that agree to trade via the telephone or an electronic network. The forex market is unique in that it has no fixed location or centralized exchange, as do many stock markets. Dealers often advertise, negotiate and transact based upon exchange rates obtained directly or via distribution networks available for the foreign currency trading market participants.

Typically in the foreign currency trading market, trades of $1 million and above constitute the institutional marketplace. Trades below this $1 million threshold constitute the retail fx market. The major dealing centers today are: London, followed by New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.

The forex market is a true 24-hour market, with dealers in every major time zone. Foreign currency trading begins Monday morning in Sydney and then moves around the globe through the various trading centers until the fx market closes in New York.

Over 85% of all fx transactions in the foreign currency trading market today involve seven major currencies: the US Dollar (USD), Japanese Yen (JPY), Euro (EUR), Swiss Frank (CHF), British Pound (GBP), Canadian Dollar (CAD), and Australian Dollar (AUD). In the forex market, currencies are primarily traded against the US dollar. This means that most exchange rates are quoted with the US Dollar as the base or first currency quoted in a pair (i.e. USD/JPY). Exceptions to the rule are the GBP, NZD (New Zealand Dollar), AUD and the EUR.

Forex Training

For convenience sake, let's say that you're studying the EURO and your trading strategies are telling you that the prices will rise or rally, during a given time frame. You buy the EUR/USD pair or, technically speaking; you will simultaneously buy euros as the base currency and sell dollars.

So, you open up your trading platform, which is usually provided for you free, by your on-line broker, and you then see that that the EUR/USD pair's are trading at EUR/USD: 1.3242/45, for example. It is important to remember that the quote (1.3242) on the left, is the bit or "sell" price, which you obtain, when in USD's when you sell EUR's. the quote, on he right (1.3245), is used to obtain the ask or the "buy" price, which is what you have to pay in USD if you buy EUR.

Based on the belief that the market price for the EUR/USD pair will climb, you then enter a "buy position" in the market. Simply put, let's assume that you've bought one lot at 1.3245 and as long as you sell the pair at a higher price; then you've made some money.

This seemingly complicated process is handled and calculated for you, via your broker's software and trading platform. The charts and quotes board software should be in agreement with all currency sides.

Let's have a look at this type of scenario, involving the USD/JPY currency pair. Remember, selling ("going short") the currency pair implies selling the first base currency and then buying the second, quote currency. If you believe that the base currency (USD) will go down, relative to the quote (JPY) currency or, equivalently , you believe that the quote (JPY) currency will go up, relative to the (USD) base currency, then you sell or "go short".

NOTE: while the Profit Calculations, on the Short-sell trade scenario below, may seem somewhat complicated if you've never been in the FOREX market before, trust us when we say, "this process is nearly seamless through your broker trade station (software). We're just showing you this thought-process below so you can SEE how a PROFIT occurs even when. also view Forex Education.

Selling a Currency Pair. The current bid/ask price for USD/JPY is 105.26/105.30, meaning you can buy $1 US for 105.30 Japanese YEN or sell $1 US for 105.26 YEN. Suppose you decide that the US Dollar (USD) is overvalued against the YEN (JPY). To execute this strategy, you would sell Dollars (simultaneously buying YEN), and then wait for the exchange rate to rise. So you make the trade: selling US $100,000 and purchasing 10,526,000 YEN. (Remember, at 1% margin, your initial margin deposit would be $1,000.). as you expected, USD/JPY falls to 104.26/104.30, meaning you can now buy $1 US for $104.30 Japanese YEN or sell $1 US for 104.26. Since you're short dollars (and are long YEN), you must now buy dollars and sell back the YEN to realize any profit. You buy US $100,000 at the current USD/JPY rate of 104.30, and receive 10,430,000 YEN. Since you originally bought(paid for) 10,526,000 YEN, your profit is 96,000 YEN. To calculate your P&L in terms of US dollars, simply divide 96,000 by the current USD/JPY rate of 104.30. Total profit = US $920.42.