About forex and forex trading
Forex (short for “foreign exchange”) is the global marketplace where one country’s currency is traded for another country’s currency.
It is the largest and most liquid financial marketplace in the world with an average of over
“$7 trillion” of business per day as of 2024.
What is Forex Trading?
“Forex trading” is the act of buying one currency while simultaneously selling another, typically in pairs like:
“EUR/USD” (Euro/US Dollar)
“GBP/JPY” (British Pound/Japanese Yen)
“USD/NGN” (US Dollar/Nigerian Naira), etc.
How It Works:
When you exchange currency, you’re betting on the “Relative Strength Of One Currency Versus Another”.
For instance:
- If you anticipate the “Euro to appreciate” compared to the US Dollar, you can buy EUR/USD.
- If the Euro increases in value against the Dollar, you gain.
- If it drops, you take a loss.
Key Features:
- “24-hours market” (Monday to Friday) – “Leverage” is often used to control large positions with a small amount of capital.
- “Highly liquid”, with easy in and out of positions.
- Driven by “Economic Indicators”, “Political Events”, “Interest Rates”, and “Sentiment”.