FX Trading

Forex Trading is simply the trading of currencies from different countries against each other. It is one of the largest markets and considering the need to exchange currencies, it is also the most liquid market in the commonly traded currency exchange pairs, with an average daily turnover of $4 trillion. The FX market is open 24 hours a day, 5 days a week and all trades are conducted over the counter through computers between the traders around the world. FX prices are influenced by a range of different factors including interest rates, inflation, government policy, demand, and supply et cetera.

Example

If you think Euro is going to rise against U.S. dollar, you can buy EUR/USD  (this represents the number of USD one euro can buy) currency pair and then sell it at a higher price to make a profit when the U.S dollar depreciates. But if U.S dollar strengthens, then you will lose money.