What is Forex? The term “Forex” is an abbreviation for foreign exchange and it can be defined as the exchange or trading of currencies. Market participants can buy and sell the currency of almost any country against another.
All foreign exchange transactions involve two currencies, for example the EUR/USD (Euro/Dollars) pair. Its exchange rate is in continuous fluctuation, and that fluctuation is at the very heart of currency trading.
If you think the Euro is going to rise versus the U.S. Dollar, then you would buy EUR/USD. Conversely, if you think its value will depreciate, then you would sell EUR/USD. This sums up the core mechanism of currency trading.
A Forex transaction involves, everything from the simple currency transactions that tourists often make when traveling, to the multi-billion dollar transactions executed by large corporations, financial institutions, and governments.
Features and advantages of the Forex Market: