The first question came into my mind at the first time I heard this term.”Forex, what kinda creature is it?”. Some negative thoughts on this term has been long time spreading in most of Indonesian (my lovely country) mind. Mainly because most of them has heard a general opinion that this creature is what brought Indonesia into bad economic crisis in 1997.

Wow, yes of course, I’m not trying to start discussing what really brought Indonesia into that crisis. I just wanna say that the first time I heard this forex term was at about 1997. That time, I left the question remain unanswered, though the curiosity was felt to be unholdable. I got some vague answers from friends, not really satisfy me.

I read everything related to forex, including forex history. Though i didnt make a deep literature research, I satisfy with the simple figure I’ve got about forex . By this, I have more understanding on what field I’d like to play in.

Forex is an abbreviation of foreign exchange and usually refer to foreign exchange market. Foreign exchange market is a modern market where currency are being traded against others. Modern, because unlike market in traditional sense, forex market has no physical location nor central exchange. The primary market for currencies is what named as interbank market or OTC (Over-The-Counter) market. Here in OTC , retail customer trades directly with the counterparty.

In the previous days, interbank market was only available for large banks, central banks, multinational corporations, government, financial institutions, currency speculator and individual who trade in large quantity and have a very high net worth. Very high net worth means a sum of money that I think can simply influence economic situation in some country (especially 3rd world country and even a developed country)

In nowadays, with the rise of technology and internet, come a form of what usually called as retail forex broker/dealers. Through this retail forex broker, forex traders with small sum of money (just like me) can jump into this game. What a good news, right?

Currencies are represented into a code contain 3 letters. GBP represent British Pound Sterling, USD for US Dollar, JPY for Japanese Yen, EUR for Eurozone Euro, CHF for Switzerland Franc, CAD for Canadian Dollar, AUD for Australian Dollar, NZD for New Zealand Dollar et cetera. The first two letters identify the name of the country and the third letter identifies the name of that country’s currency.

Since in forex trading currency is traded again other, it usual to hear term of currency pair. Currency pair refer to two currencies which are traded against each other. GBP/USD refer to trading GBP against USD, in which GBP plays as the base currency.