What is forex?

Forex or the foreign exchange market is the decentralized global market where currencies are traded. Currencies usually refer to the legal tender or money that countries of the world use. Different countries use different currencies.

For various reasons, currencies need to be changed from one to another. The rate at which one currency is exchanged for another currency is called the ‘exchange rate‘. The Forex market may also be called the ‘Fx market’, ‘Currency market’, ‘Foreign exchange currency market’ or ‘Foreign currency market’, and it is the largest and most liquid market in the world.

What is forex trading?

Forex trading involves buying and selling currency pairs in-order to make profit out of it. Forex traders try to buy currency pairs when they are cheap, and try to sell when they are expensive. Therefore, they speculate and try to predict what will happen to the exchange rate. Therefore, a forex trader buys a currency pair, if he believes that the pair will go up in price after he buys, and he sells the pair if he has reasons to believe that the price of the pair will go down after he sells it.

For example, if you think US Dollar (USD) is going to raise in value against Canadian Dollar(CAD), you will buy the pair USDCAD and wait until it goes up and close the buy position when it has reached your target. If the currency pair goes up after you opened a buy position, you make profit. However, if the currency pair actually goes down after you opened a buy position (means your prediction is wrong), you make loss.

If you think USD is going to go down in value against CAD, you will sell the currency pair USDCAD and wait until it goes down and reach your target and then you will close the trade. If the currency pair goes down after you opened a sell position, you make profit. However, if the currency pair actually goes up after you opened a sell position (means your prediction is wrong), you will make loss.

One-on-one forex training
The easiest and fastest way to learn forex is through a forex trainer. Thanks to today’s technology, one-on-one training sessions can now be conducted regardless of location, if you have a computer with internet access.

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