Forex, short for foreign exchange, refers to the global decentralized market where different currencies are traded. It is the largest and most liquid financial market in the world, with participants ranging from large financial institutions and multinational corporations to individual traders.
Forex trading involves the buying and selling of currencies with the aim of profiting from the fluctuations in their exchange rates.
Currencies are always traded in pairs, such as:
EUR/USD (Euro/US Dollar) or
GBP/JPY (British Pound/Japanese Yen).
The exchange rate of a currency pair represents the value of one currency relative to another.
The forex market operates 24 hours a day, five days a week, allowing traders to engage in trading activities at any time. It is a highly accessible market, as it can be accessed through online trading platforms provided by brokers.
Forex trading offers various opportunities for investors and speculators. Some participants, like multinational corporations, engage in forex to facilitate international trade by converting currencies. Others, such as individual traders and institutional investors, aim to profit from price movements by speculating on the direction of currency pairs.
