This depends on how liquid the currency is, or how much of it is being bought and sold at any one time. The most liquid currency pairs are the ones with the most supply and demand in the Forex market, and this supply and demand is generated by banks, businesses, importers and exporters, and traders. Major currency pairs tend to be the most liquid, with the EUR/USD currency pair moving by 90-120 pips on an average day.
In developed nations, the state control of the foreign exchange trading ended in 1973 when complete floating and relatively free market conditions of modern times began. Other sources claim that the first time a currency pair was traded by U.S. retail customers was during 1982, with additional currency pairs becoming available by the next year.
The world then decided to have fixed exchange rates that resulted in the U.S. dollar being the primary reserve currency and that it would be the only currency backed by gold, this is known as the ‘Bretton Woods System’ and it happened in 1944 (I know you super excited to know that). In 1971 the U.S. declared that it would no longer exchange gold for U.S. dollars that were held in foreign reserves, this marked the end of the Bretton Woods System.
The foreign exchange market – also called forex, FX, or currency market – was one of the original financial markets formed to bring structure to the burgeoning global economy. In terms of trading volume it is, by far, the largest financial market in the world. Aside from providing a venue for the buying, selling, exchanging and speculation of currencies, the forex market also enables currency conversion for international trade settlements and investments. According to the Bank for International Settlements (BIS), which is owned by central banks, trading in foreign exchange markets averaged $5.1 trillion per day in April 2016.
Second, since trades don't take place on a traditional exchange, you won't find the same fees or commissions that you would on another market. Next, there's no cut-off as to when you can and cannot trade. Because the market is open 24 hours a day, you can trade at any time of day. Finally, because it's such a liquid market, you can get in and out whenever you want and you can buy as much currency as you can afford.
A spot transaction is a two-day delivery transaction (except in the case of trades between the US dollar, Canadian dollar, Turkish lira, euro and Russian ruble, which settle the next business day), as opposed to the futures contracts, which are usually three months. This trade represents a “direct exchange” between two currencies, has the shortest time frame, involves cash rather than a contract, and interest is not included in the agreed-upon transaction. Spot trading is one of the most common types of forex trading. Often, a forex broker will charge a small fee to the client to roll-over the expiring transaction into a new identical transaction for a continuation of the trade. This roll-over fee is known as the "swap" fee.
There is nothing wrong with attempting intraday trading. The only thing you need to keep in mind is to never risk more than 2% of your trading capital on any trade. Traders can avoid significant losses in their trading if they trade with proper risk management in place. When day trading is backed by a trend and high volatility, you won't be late to discover trading opportunities and book your profits thereafter.
Forex banks, ECNs, and prime brokers offer NDF contracts, which are derivatives that have no real deliver-ability. NDFs are popular for currencies with restrictions such as the Argentinian peso. In fact, a forex hedger can only hedge such risks with NDFs, as currencies such as the Argentinian peso cannot be traded on open markets like major currencies.
The quality of the trading tools a Forex broker offers can make a big difference to your trading experience. In most cases, the available tools will depend on the trading platform (or platforms) being used. For instance, Admiral Markets offers trading through the state of the art MetaTrader 4 & 5 Supreme Edition plugin, which include a range of custom tools and add-ons to improve your trading experience.
Hedge funds – Somewhere around 70 to 90% of all foreign exchange transactions are speculative in nature. This means, the person or institutions that bought or sold the currency has no plan of actually taking delivery of the currency; instead, the transaction was executed with sole intention of speculating on the price movement of that particular currency. Retail speculators (you and I) are small cheese compared to the big hedge funds that control and speculate with billions of dollars of equity each day in the currency markets.