What is Forex?
(Introduction)
Forex and FX is short for FOReign EXchange. Basically, the Forex market is the “place” where
governments, banks, businessman, investors and independent traders come to
exchange and speculation based on the interest rate differential between two
currencies. The Forex market is the largest and most liquid financial market in
all over the world with an estimated $4.9 trillion traded on the market daily.
The business of Forex Trading is the prediction of when to
buy or when to sell different types of currency, with the expectation that the
purchased currency will increase in value and earn you a profit when you sell
it.
Forex traders are constantly
researching and analyzing market to decide what currency to trade for maximum
profits. Supposing you are trading the EUR/USD hoping the Euro will gain value
over the US Dollar, opening a trade means buying a predetermined amount of
dollars in exchange for Euros at the current market price: conversely, when
closing the same trade you are reselling Euros in exchange for US dollars.
