What is forex trading?

Forex trading, also known as foreign exchange trading or currency trading, involves buying and selling currencies on the foreign exchange market with the aim of making a profit. The forex market is the largest and most liquid financial market in the world, where currencies are traded 24 hours a day, five days a week.

In forex trading, currencies are traded in pairs, where one currency is exchanged for another at an agreed-upon exchange rate. For example, in the EUR/USD currency pair, the euro is the base currency, and the US dollar is the quote currency. Traders speculate on the future price movements of currency pairs, aiming to profit from fluctuations in exchange rates.

Forex trading can be conducted through various platforms provided by brokers, which offer access to the market and tools for analysis and execution of trades. Traders can take advantage of leverage to amplify their trading positions, allowing them to control larger positions with a smaller amount of capital. However, trading on margin also increases the risk of losses.