Forex markets are extremely profitable as there is constant action. National currencies fluctuate from day to day, causing a constant stream of reactions. The concept of trading

in forex markets is similar to buying on the stock market buy low and sell high. Forex market traders buy up currencies that are weaker and sell them when they are strong.



Forex markets are not physical marketplaces, but markets online where thousands of transactions take place. Though the transactions are very real, no physical money actually changes hands. Because the transactions are not conducted face to face, it leaves room for leverage or margins. This means that traders dont actually have to put up the full amount of money for the position you are taking. The margin is usually 1%. The margin is great when it works in your favor, but dont forget it can, and sometimes will, work against you.





One of the reasons for allowing a 100:1 margin is because the major world currencies in forex markets dont usually fluctuate more than 1% per day. If youve ever traded on the stock market, you probably know that a typical stock may fluctuate by up to 10% in one day.



Forex markets also tend to deal with higher amounts of money. Because if the relative stability (compared to the stock market), people can invest higher amounts of money with greater confidence of making a profit. Thats not to say there havent been some big losses in the forex markets, but you just dont hear about them as often as you hear of big losses in the stock market.