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What Is Forex Trading & How Does It Work

 What Is Forex Trading & How Does It Work



Forex trading, or foreign exchange trading, is the global exchange of one currency for another in an attempt to profit from changes in their relative values: 

How it works

In forex trading, you buy one currency while simultaneously selling another. For example, if you think the euro will strengthen against the US dollar, you might buy euros and sell dollars. 

Currency pairs

Currencies are traded in pairs, with each currency in the pair represented by a three-letter code. For example, USD stands for the US dollar and XAU stands for the Gold. 

The forex market

The forex market is the world's largest and most liquid market, with trillions of dollars traded daily. It's made up of an electronic network of banks, brokerages, institutional investors, and individual traders. 

Factors that affect the market

The forex market is influenced by a number of factors, including terms of trade, public debt, and inflation rates. 

Trading hours

The forex market is open 24 hours a day, five days a week, but is closed to speculative trading over the weekend. 

Forex trading can be profitable, but it's important to consider timeframes. It's easy to be profitable in the short-term, such as when measured in days or weeks. 

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