Forex trading is speculating on the price of one currency against another currency. For example: if you think that the Euro will rise against the US dollar, you can buy a EUR/USD currency pair for a low price. If the Euro rises, you can sell it for a higher price to make a profit.
At the forex market banks, governments, investors, businesses and traders come together to exchange and speculate on currencies, like the Euro or the US dollar. The Forex market is known as the ‘Fx market’, the ‘currency market’, ‘the foreign exchange currency market’ or the ‘foreign currency market’. It’s the most largest and most liquid market in the world. Trillions of Euros are traded in currencies on a daily basis.
The Forex market is open 24 hours a day, 5 days a week. The most important and famous world trading centres are located in New York, London, Zurich, Tokyo, Frankfurt, Paris, Sydney, Hong Kong and Singapore.
The advantages of Forex trading
- Earning money by speculating on increases and decreases
- You can trade 24 hours a day and 5 days a week
- A big advantage are the potential large profits with a limited investment
- You can choose your own stop-loss, so you decide the risk you want to take
- No commissions charged: brokers making money on the spread between the bid and ask
Want to start forex trading? Compare the free demos or open a traders account right away.