Forex market, the largest financial market in the world, first started out in 1971. This was created when the floating exchange rates began to materialize. This market is not centralized like the stock market or the futures and the trading depends on computers and communications between thousands of Forex companies around the world.
As the currencies of different points in the world never sleep, the market is open for 24 hours. The 24-hour interbank market is the main market for the currencies. The market follows the sun wherever it is up and will move from one major banking center to the next, from the United States to Australia, to New Zealand to South East Asia, then to Europe and back to the United States.
FOREX stands for Foreign Exchange market where the various banks, investors and speculators participate in an activity involving exchanging of currencies with each other. The largest activity happens between five currencies: US Dollar, British Pound, Eurodollar, Swiss Franc and the Japanese Yen.
The FX market is considered as an interbank market as all transactions are done between two participants through the communications network. The trading itself is not centralized on an exchange like those of the stock market and the futures market. Compared to other financial markets, the investors in the FX can react to any fluctuations in prices of currencies due to political, economic or social influences that happen on real time, whether it is day or night.
The professional traders of the major international commercial and investment banks dominate the FX market. But multinationals, global money managers, registered dealers, international money brokers, futures traders, options traders and private speculators also participate.
The daily trader is a highly active currency trader who holds short time positions and can make several trades in a day. They are those traders who try to make a career out of the buying and selling of the stocks in a quick manner, sometimes they can make several dozens of trades in a day and can close their position when they feel like it.
It used to be that the floor trader held exclusivity to day trading. However, since the arrival of the Internet, the day trading activities is now a free-for-all sort of affair. Now, anyone can join in the fun of speculation.
Day trading can be a costly adventure since commissions and the bids/ask spreads can add up when there are too many transactions being worked on at a single time. If the day trader gets overwhelmed because of inexperience, they can lose a lot of money.