What is Forex Trading?
Forex trading, also known as foreign exchange trading or currency trading, is the buying and selling of currencies in order to make a profit from changes in their exchange rates. Forex trading is typically done through a broker or market maker and is open to individuals, institutions, and businesses.
In forex trading, currencies are always traded in pairs, with the value of one currency being quoted against the value of another currency. For example, the EUR/USD currency pair represents the value of the euro relative to the U.S. dollar. Traders can buy a currency pair if they think its value will increase, or sell a currency pair if they think its value will decrease.
Forex trading is typically done using leverage, which allows traders to control large positions with a relatively small amount of capital. This can increase potential profits, but also increases the risk of losses.
The forex market is the largest and most liquid financial market in the world, with an average daily trading volume of over $6 trillion. It is open 24 hours a day, 5 days a week, and is traded by a diverse range of participants, including banks, hedge funds, corporations, and individual traders.