The awareness and interest in forex trading has certainly increased drastically over the last couple of years, with more and more people looking at additional income and even starting a career around online trading.
Foreign exchange, also known as currency, or Forex ( FX trading), is the world’s largest decentralized global market where all the world’s currencies are traded. The need to exchange currencies of different jurisdictions is the sole reason why thr Forex market is the largest financial market.
Foreign Exchange prices are influenced by a range of different factors, including inflation, interest rates, government policy, employment figures and demand for imports and exports.
Because of the sheer volume of Forex market traders and the amount of cash exchanged, price movements can happen very quickly, making currency trading not only the largest financial market in the world, but also one of the most volatile.
Forex trading is the simultaneous buying of one currency and selling of another. These two currencies make up what is known as a "currency pair". Currencies are always traded in pairs - each currency is represented by three letters. Learn to trade with Stock Market Dynamics.
EUR/USD = 1.23700
The currency to the left of the slash ("/") is called the base currency (in this example, the Euro) and the currency on the right is called the quote currency (in this example, the U.S Dollar). This notation means that 1 unit of the base currency (that is, 1 Euro) is equal to 1.23700 U.S Dollars. You have to pay 1.23700 U.S Dollars to buy 1 Euro
If selling, the foreign currency exchange rate specifies how much units of the quote currency you get for selling one unit of the base currency. In the above example, you will receive 1.23700 U.S Dollars when you sell 1 Euro