What is Forex?

Forex, FX – short for ‘foreign exchange’ – is trading currencies of different countries against each other. Forex is one of the largest global financial markets for trading various currencies.
It assists international trade and investments via foreign exchange transactions.

Forex transactions involve two currencies, which form a so-called currency pair. One currency is bought, while the other is sold.

Consider the EURUSD currency pair. If you buy this pair, you will be buying euros and selling dollars. If you sell this pair, you will be selling euros and buying dollars. If buying of the currency pair exceeds selling, the price goes up. If selling exceeds buying, the price goes down.

The decision to buy or sell the currency pair depends on your expectations of the future price. If you think that EURUSD will rise, you buy the pair or, in other words, open a long position on it. If you believe that the EURUSD will fall, you sell the pair or, as traders say, open a short position on this pair. As some time passes and the price of EURUSD changes, you close the position and profit if the price changes in line with your expectations. If the price moved the opposite way, you have a loss on this transaction.

The amount of profit depends on how much the rate of this currency pair has increased during this time and on the size of your position.

One of the main advantages of the Forex market is high liquidity. Exchange rates usually move very lively, and you can profit on the moves of the price anytime you like. 

All trading is done through the Internet. There is no physical location where investors go to trade currencies. All the currency trading we will do will be done online. You will need to download special software from a broker's website or use a web trading terminal. The trading terminal will connect you to real-time quotes of various currencies.

You can see how it works by opening a Demo account.