What is forex?
Forex is short for foreign exchange, specifically to the currencies of other nations. Many people invest their money in foreign currencies because they can make a huge profit in this way. The currencies in which people trade most often include the American and Australian dollars, the British pound, the euro and the Japanese yen. Other currencies, such as the Nigerian naira, are occasionally the targets of forex investors. Besides making a profit for the investors themselves, forex trading can be of great assistance in international trade because it enables the currencies of different nations to be converted into one another. (This form of trading is by no means modern; it was practiced in ancient times, but that is another story. It is certainly more popular now than ever before.)
The role of the broker
As with practically every form of investment, if you want to go into forex trading, it will be wise to enlist the aid of a broker, whose function is to serve as an intermediary between the buyer and the seller. There is no central exchange for forex, you should realize; the brokers negotiate directly with the dealers in this over-the-counter market. The broker earns his or her income from the pip, or the difference between the rates at which the two currencies are bought and sold.
How to decide which broker to choose
Some forex agents have private offices while others are provided by firms. For those who are completely new to investing, the place to go is the National Futures Association, which is one of the best sources there are for forex brokerage firms. If, on the other hand, you already have an investment broker but that person does not do forex trading, then ask him or her to make a referral for you, making it clear whether or not he knows the reputation of that professional or company.
One of the best places where you can go to find an agent is Forex Pulse, you can locate brokers according to the country from which they come or in which they operate, or according to their ratings or type (STP, ECN, MM and so on). There is also a best brokers list where we found a review of iForex, a forex company highly rated by Forex Pulse. You can also view vital statistics, news and comments on each broker. A separate page is available for comparing any two agents.