Forex Trading Using Intermarket Analysis

FOREX 
Forex Trading Using 
inTermarkeT analysis

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If you have traveled internationally, you probably are well aware of 
the foreign exchange market, often called the forex or FX market. 
When you converted U.S. dollars into euros or yen or vice versa at a 
bank or currency exchange, you may have noticed big differences in 
the buying power of your currency, depending on when and where you 
you made the transactions. Although you may have noted the impact 
on your pocketbook, you may not have realized that you were also 
participating in the largest market in the world.
The forex market trades an estimated $1.5 to $2.5 trillion a day. No 
one really knows what the actual figure is because there is no central 
marketplace for keeping tabs on all of the forex transactions around 
the world. The forex market is massive, dwarfing the $30 billion a day 
traded at the New York Stock Exchange. In fact, forex trading exceeds 
the combined volume of all the major exchanges trading equities, 
futures, and other instruments around the globe.
Although professional traders implementing sophisticated strategies 
account for most of the trading in the huge forex market, participation 
by individual traders has grown tremendously in recent years with 
the proliferation of the Internet, enhancements in personal comput-
WHaT is 
Forex?
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ers and trading software, the launch of dozens of cash forex firms 
taking advantage of online trading, and the globalization of markets 
in general. The introduction of the euro on January 1, 1999, and the 
weakness of the U.S. dollar after peaking in 2001 also contributed to 
the surge of interest in forex trading. Increased numbers of individual 
traders became aware of the role of forex in global markets with an eye 
toward profiting as currency trends unfolded.
More international trade, reduced government regulation, expansion 
of democracy worldwide, the increase in private ownership and free 
enterprise concepts, and a greater acceptance of free-market trading 
principles should keep the forex market at the forefront of traders’ 
attention for many years to come.