Currency Trading

All currency has a value relative to other currencies on Earth. It is a process of purchasing and selling of large quantities of currency to leverage the shifts in relative value into profit.

Currency trading is the largest market on the Earth. It is estimated that in excess of US$2 trillion is traded every day. Only because of two reasons value of a currency fluctuates. First reason is ’real’ market: as outside investors or visitors wish to buy things within a country, they are forced to convert their domestic currency into the currency of the country they are buying within. Similarly, as money leaves the country, people must sell their currency for the foreign currency they will need to spend or invest abroad.

Forex

The “Forex”is the short form of Foreign Exchange. It is also called “Spot FX” market. In Foreign Exchange trading, the currency of one nation is traded for that of another. Therefore, Forex trading is always traded in currency pairs. The most commonly traded currency pairs are traded against the US Dollar (USD). The major currency pairs are the Euro Dollar (EUR/USD); the British Pound (GBP/USD); the Japanese Yen (USD/JPY) and the Swiss Franc (USD/CHF).

Currency Exchange

The currency exchange rate is the rate at which one currency can be exchanged . It is always quoted in pairs like the EUR/USD . Exchange rates fluctuate based on economic factors like inflation, geopolitical events and industrial production . These factors will influence whether you buy or sell a currency pair.