What Is Forex Trading: Short Forex Trading Definition

What Is Forex Trading: Short Forex Trading Definition

The Forex (or Foreign Exchange – the most common forex trading definition) market is an international
over-the-counter market where traders, investors, financial institutions, & banks buy and sell world currencies,
exchange them, and speculate on their value. 

What Is Forex Trading 

Forex in trading occurs on the interbank market – an online channel through which currencies are bought and
sold 24 hours a day, five days a week.

Forex is one of the largest trading markets with an international daily turnover of over USD 5 trillion.
All transactions in the forex market are concluded in the simultaneous purchase and sale of two currencies –
currency pairs, consisting of the base currency and the quote currency. For example, the most common currency
pair in forex trading is EUR / USD (Euro / US Dollar). In this case, the EUR is the base currency, and the dollar is the
quoted currency, respectively.   

How Do Currencies Trade On

Forex trading means that you deal with the act of buying and selling currency to make a profit.
The price of one currency depends on the price of another currency. So, transactions are always made in
two currencies simultaneously.
If you want to make a trading profit, you have to buy a currency at a lower price and then sell one at a higher price.
You can also sell it at a higher price and then buy it at a lower price. The income amount depends on the difference
between the purchase price and the sale price.

If you predict the direction of price fluctuation correctly, you will make a profit, in another case – a loss.
Thus, you can earn the rise in the price of the currency and its cheapening.

Leave a comment

Send a Comment

Your email address will not be published. Required fields are marked *