Infographic Category Finance

What is Forex?

By | source:AdmiralMarkets Jul 21st, 2016

Foreign exchange trading goes by many names – currency trading, currency exchange, Forex, FX, etc.

But to sum it up in one word, Forex trading is speculation.

24 hours a day and five days a week, Forex traders around the world hope to generate profit by speculating on the value of one currency against another.

The value of currencies fluctuates all the time due to economic and geopolitical factors. Speaking broadly, currencies are influenced by supply and demand.

Market participants who make use of these changes and predict exchange rate can make profit and sometimes even a living.

Initially accessible only to major financial institutions, currency exchange became available to average investors. In our global times, when countries and companies are constantly trading with each other, exchanging currencies becomes a necessity.

It is due to this high need to exchange currencies that Forex trading enjoys a growing popularity among financial investors. The foreign exchange market is one of the largest markets in the world, with a daily turnover of over $5 trillion – that’s more than stock and futures markets combined.

If you want to become part of this market, you need to start with the basics.