Foreign Exchange is one of the most-searched topics on google today. The exchange of currencies has not only been in practise for hundreds or even thousands of years, but today is one of the largest markets in the world. Most of us will be involved in some form of foreign exchange at one time or another in our lives. How? Well, think of the last time you went abroad to a country which uses another currency to your own. You had to employ a method to exchange one currency to another. You may have visited a bureau de change, or done your currency exchange online in advance (there are literally hundreds of online travel money providers available on the internet). That was your part in the foreign exchange world! So next time you go on holiday, think of the link between your simple exchange over the counter or online to the massive liquid market where that money is exchanged and moved around each minute of the day. The Foreign exchange (or Forex) trading market takes place 24 hours a day around the world.
When you visited the bureau de change or online money provider, the foreign exchange provider will have offered you the currency you requested at a rate of exchange – so when your money changed into the other, a percentage was “lost” – this rate will have varied according to your method of exchanging currencies. Now, if you compare rates with an online provider with that of a regular high street bureau de change, you will notice that the online rate is much smaller. This is because the online companies are able to access the best rates from the best currency dealers, and pass it on to you. High street lenders generally have much higher exchange rates, and may even charge you a commission on top of that! Online providers can even deliver you cash or travellers cheques straight to your door – next day. While you access forex perhaps once or twice a year, there are millions of people who are accessing the forex market repeatedly throughout the day!