What is Forex Trading?
Forex, also known as foreign exchange, is a global market where currencies trade. It is the world’s largest and the most liquid market offering unique trading opportunities. Simply put, forex trading involves exchanging one currency for another at the exchange rate. Converting one currency for another is a forex transaction.
Make Profit on Your Opinion
Exchange rates fluctuate depending on a range of factors including interest rates, inflation, economic performance, and political events. Having analyzed these factors, you make projections on the value of a certain currency. Based on your expectations, you can buy or sell currencies.
Example of a Forex trade
The EUR/USD rate represents the number of US Dollars that one Euro can purchase. If you believe that the Euro will increase in value against the US Dollar, you will buy Euros with US Dollars. If the exchange rate rises, you will sell the Euros back, making a profit.