Forex trading, also known as foreign exchange or currency trading, can seem overwhelming to beginners. With its complex terminology and fast-paced nature, it’s important to have a solid understanding of the basics before diving into the world of forex. In this beginner’s guide, we will break down the essential aspects of forex trading and provide you with the necessary knowledge to get started.
What is Forex?
Forex refers to the global decentralized market where the world’s currencies are traded. It is the most liquid market in the world, with trillions of dollars exchanged daily. This market operates 24 hours a day, five days a week, giving traders the opportunity to trade currencies at any time.
The primary purpose of forex trading is to speculate on the price movements of various currency pairs. Traders aim to profit from these fluctuations by buying a currency pair at a low price and selling it at a higher price, or vice versa. The currency pairs are quoted in terms of one currency against another, such as EUR/USD or GBP/JPY.
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