Performance information may have changed since the time of publication. Foreign exchange trading—also commonly called forex trading or FX—is the global market for exchanging foreign currencies.

what is forex

Market participants can trade in the spot market and also buy and sell derivatives. For example, a person could exchange the US dollar for the Japanese Yen. Forex offers deep liquidity and 24/7 trading, so investors have ample opportunities to get involved.

What Charts Are Used In Forex Trading

To open a long position, you’d trade slightly above the market price and to open a short position, you’d trade slightly below the market price . Like most financial markets, forex is primarily driven by the forces of supply and demand, and it is important to gain an understanding of the influences that drive these factors. It is the term used to describe the initial deposit you put up to open and maintain a leveraged position. When you are trading forex with margin, remember that your margin requirement will change depending on your broker, and how large your trade size is.

what is forex

The forex or foreign exchange market is a worldwide, decentralized and mostly unregulated market for trading in currencies for speculative or commercial purposes. Since trading scams Forex news do sometimes occur in the forex market, read on to find out how you can avoid them and find the best legit forex brokers so you can start to make money trading the forex market.

Foreign Exchange Market

Many factors can potentially influence the market forces behind foreign exchange rates. The factors include various economic, political, and even psychological conditions. The economic factors include a government’s DotBig broker economic policies, trade balances, inflation, and economic growth outlook. Despite the huge size of the massive forex market, it is one of the few predominantly unregulated financial markets.

People purchase currency based on their belief that the currency will change in value. Take a look at everything you need to know about the forex market and how it works, as shared by the experts at Axi. Every day brings a whole host of headlines about the financial markets. Get daily investment insights and analysis from our financial experts.