Forex trading, foreign exchange trading, or FX trading is the process of exchanging or buying and selling different currencies in a global market. It’s one of the most active financial markets in the world, and it handles trillions of dollars in transactions every day despite not having a centralized physical location. Businesses, banks, and individuals all operate in the FX trading market and aim to profit from the price difference.
In the forex, traders deal with currencies, cryptocurrencies, indexes, commodities, contracts for difference (CFDs), and spreads. Currencies can be traded in pairs based on their exchange rates. Traders focus on these exchange rates because they determine the value of one currency relative to another, investing in currencies they believe will rise in value.