What Forex means?
Foreign Exchange (Forex) refers to the foreign exchange market. It is the over-the-counter market in which the foreign currencies of the world are traded. It is considered the largest and most liquid market in the world.
Forex, or the foreign exchange market (also called FX for short) is the marketplace where currencies are traded. At its simplest, a foreign exchange transaction might be, for example, when you transfer your local currency to a new one for an upcoming holiday. Across the market as a whole, an estimated 5.3 billion USD is traded every day between governments, banks, corporations, and speculators.
The relative weight of the trading party to the market is measured by how much money that party manages — from billion-dollar hedge funds and investment banks to private traders with a few thousand dollars in action.
Understanding Currency Pair
Currencies are traded as pairs, and the movement of currency pairs measure the value of one currency against another. For instance, the EUR/USD currency pair measures the value of the Euro against the US dollar.
When the value of the pair increases, this means the value of the Euro has increased against the value of the US dollar. When the value of the pair decreases, this means the value of the US dollar has increased (or the value of the Euro has fallen).
By trading Forex and CFDs, traders can make a profit off of these currency movements.