The foreign exchange market (or “forex”) is the most recent addition to the world of online trading and has gathered much attention in recent years.  Because forex trading and forex brokers in the United States went largely unregulated for many years, the forex market has attracted a lot of dishonest players and has garnered a bad reputation (and rightfully so).  Things have gotten slightly better and brokers are making good efforts to be more transparent with their clients, however, anyone thinking about trading forex should carefully examine the benefits and drawbacks to this market.

 

A sad history:  The primary appeal for many forex traders is the very low account sizes needed to open an account.  This combined with very high leverage of 400:1 in some cases would let unsophisticated traders with a $1,000 account control $400,000 trade positions.  Because off this, forex soon became the “Las Vegas” off the online trading word and the gamblers were signing up for new forex accounts by the millions.

Suggested next reading:  Advantages and Disadvantages of Forex Trading
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