One of the biggest secrets of the financial world was Forex. Although this is the largest financial market on the globe, it was not as renowned as it should have been. Forex escaped the scrutinizing eye of most people and thus remained the sole domain of big corporations, major banks and other large financial entities. Could it be they were not ear to share their information about Forex with the rest of the world? Either way, investors from every level can't wait to find new markets to get into and Forex (FX) is ripe and ready for investigating.

So what exactly is FX? It does not trade stocks, options or futures. Instead Forex is the huge market through which currency is traded. While the stock exchange and other financial markets are governed, FX does not have an official panel or board to govern its actions. That means there is no formal arbitration process if someone feels they were cheated by another trader in this market. The FX market is self-regulated. Members work out issues based on their own word of mouth and certain credit-like agreement. Everyone knows they must rely on each other to trade from day to day so it is in every member's best interest to do so fairly and honestly.

For many traders who deal with other financial products in other market, FX day trading is almost like a little vacation from it all. There are less governing bodies to contend with which means there are fewer binding rules and regulations to worry about when making trades. An example of this involves “inside trading”. In the world of FX, there is no such thing as insider trading. When you know something is beneficial or harmful regarding the exchange rate of a certain currency, you can feel free to capitalize on that information along the way. However, if you had equivalent information in the stock market and tried to capitalize on it in such as way you are likely to get into deep trouble.

Though there are less rules and regulations to content with in FX trading, it is still not exactly an easy walk in the park. Consider FX trades earn a lofty 2 trillion US dollars per day from Sunday night until Friday afternoon. The amounts to a whopping 12 trillion dollars per week. Annually, it totals a staggering 624 trillion per year, which is definitely plenty of beans.

This does not mean you should imagine FX day traders struggling up to a building somewhere with wheelbarrows overloaded with cash ready to exchange, trade or sell. Understand that the FX market technically sells “nothing” because traders are done as a “speculative market” by computer. The market exchanges one type of currency for another. There are many reasons this might need to be done, such as processing payroll for a multinational corporation.

Another important piece of information to know before you diversify your portfolio with FX day trading is that currencies always trade in pairs. Insider refer to one pair as long and the other as short. The long refers to what you have while the short is what you want to have. One the trade is complete, this can be expressed in the reverse.