Foreign exchange widely called as Forex or FX is a decentralized worldwide market where the whole world’s currencies trade. The forex is the largest and most liquid market in the world with an average daily trading volume more than $5 trillion.
In this market one currency is exchanged for another. One can buy or sell a currency in exchange of other. The basis of profit is the exchange rate between two currencies. These currencies always quoted in pairs like GBP/USD (UK pound and US Dollar). Suppose you think that the exchange rate of EUR will rise against the US Dollar you buy the pair of EUR/USD and sell it on the rising of exchange rate of the pair.
Forex trading business is a very profitable business provided one should learn the Forex trading and operates it in systematic manner. But please note that it is not overnight rich business as it involves high risk of losses
I will discuss in my next post about the principal and procedure of trading.