Forex

The term 'Forex' or 'FX' is short for 'foreign exchange'. What is being exchanged on this market is not stocks or bonds, but currencies from around the world. In other words, the Forex market is the place where U.S. dollars, Euros, Yen and other major currencies are bought and sold. It represents the largest financial market in the world by volume. Starting with the simplest example of currency exchange that most people are familiar with is that of exchanging one currency for another when traveling overseas.

Sometimes you get more for every dollar you exchange than other times. You will notice that foreign exchange rates never remain the same and are constantly changing. This volatility in exchange rates can enable you to make a lot of money in the forex market with forex currency trading.

The aim is to exchange one currency for another in the expectation that the currency you bought will increase in value compared to the one that you sold. Currencies are traded through a forex broker and the currencies are always quoted in pairs, for example (EUR/USD).