What is forex?

 What is forex?

What is forex?

Many people want to enter the world of securities, trading and making profits, but they do not know where to start, and in order to do so, they must know what forex is, so that they can start working and trading foreign currencies, gold and silver.

What is forex?

Forex also known as the foreign exchange market is a place where currency pairs such as EURUSD or GBPUSD are exchanged.

Their price changes in the market are invested to make money.

The foreign exchange market is an over-the-counter (OTC) market; Investors and traders use it to buy and sell currency pairs.

Compared to most other tradable financial assets, currency is an economic indicator and economic tool.

In other words, if the country is a corporation, the currency is its share.

Forex is a global financial trading market

Forex or foreign exchange market is the largest financial market in the world.

The daily trading volume exceeds 5.09 trillion US dollars.

In other words, within one day, the money traded in the foreign exchange market will exceed the value of Japan’s GDP!

Of these transactions, $254 billion were traded through CFDs and other derivative financial instruments.

As the largest and most active financial trading market in the world, it is also the most liquid market in the world.

In order to know what forex is, you should know that it is easy for beginners to participate in currency trading and they can enter and exit transactions.

For the most liquid currency pairs, they can trade currencies at a very low cost (even as little as 1 pip!).

This also means that the foreign exchange market is very turbulent.

This creates many opportunities for traders to take advantage of the positive and negative movements of currency trading.


To understand what forex is, you must first understand the working principle of currency pairs, and then move on.

For example, let’s take the EUR/USD pair as an example.

The euro is called the base currency (or transaction currency).

While the US dollar is called the counter currency.

It allows us to achieve a balance of strength between the base currency and the relative currency of the exchange rate.

When viewing EURUSD or other currency pairs on different trading platforms.

We can see two prices: the buy price and the sell price.

They usually appear as: EURUSD 1.1034 / 1.1035. The ask price indicates that we can buy 1 euro at $1.1035.

In parallel, the bid price of the currency means that we can sell 1 EUR at 1.034 USD.

It is easy to say that banks usually sell more currency than they accept.

They are able to do this because they are more influential than psychics.

What are currency pairs?

In order to know what forex is, you must know the most important currency pairs and the most important and well-known traded currencies.

The most commonly traded currencies are the euro (EUR), the US dollar (USD), the Japanese yen (JPY), and the British pound (GBP).

So is the Swiss Franc (CHF).

Therefore, the most popular currency pairs also called major professional currency pairs are the most used currency pairs.

The most traded currencies are: the euro against the dollar, the pound against the dollar, the dollar against the yen, and the dollar against the Swiss franc.

Three other currencies are very common in foreign exchange transactions: the New Zealand dollar (NZD), the Australian dollar (AUD) and the Canadian dollar (CAD).

When linked to other currencies in a pair, they are classified as “crosses”: NZDCAD, USDCAD or AUDUSD.

All currency pairs, including the Russian ruble, Czech koruna, Polish zloty, Hungarian forint, Swedish krona or Norwegian krone, are considered currency pairs.

Strange currency pairs. They represent only 10% of the currency exchange market.

This was an introduction to the beginner to know what is forex? In order for them to start and understand the foreign exchange market to enter the world of trading.


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