What is Forex
Forex (Foreign Exchange) trading is the process of buying and selling currencies on the foreign exchange market to profit from changes in their exchange rates. The forex market is the largest and most liquid financial market in the world, where currencies are traded in pairs (e.g., EUR/USD, GBP/JPY).
The goal is to speculate on whether one currency in the pair will strengthen or weaken relative to the other. Traders can make money if they correctly predict price movements, whether the value of a currency goes up (long position) or down (short position).
Forex trading typically involves
1
Currency Pairs
Two currencies are always traded together. The first is the base currency, and the second is the quote currency.
2
Leverage
Traders often use leverage to control larger positions with a smaller amount of money. This can magnify profits but also increases risk.
3
Market Hours
The forex market is open 24 hours a day, five days a week, allowing for trading at any time around the world.
Trading strategies vary widely and can include technical analysis, fundamental analysis, or algorithmic trading.
