- Forex trading, also known as foreign exchange trading or currency trading, is the buying and selling of currencies in order to make a profit. Forex traders attempt to predict the future movements of currency prices in order to make profitable trades.
Forex trading works by trading one currency against another in pairs. The value of a currency is determined by its exchange rate against another currency. For example, the exchange rate between the US dollar and the euro is represented as EUR/USD. Traders can buy or sell a currency pair, and profit or lose money based on the difference in price between when they entered the trade and when they exited the trade.
Forex trading takes place on a decentralized market, which means that there is no central exchange or clearinghouse. Instead, traders buy and sell currencies through a network of banks and brokers, who act as intermediaries between buyers and sellers.
The forex market is open 24 hours a day, five days a week, and is the largest and most liquid financial market in the world. It is accessible to individual traders through online forex brokers, who provide trading platforms and tools for analyzing the market and making trades. However, forex trading carries significant risks and requires a thorough understanding of the market and its complexities.
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