Forex or Foreign Exchange is when different currencies from different countries are traded against each other, buying and selling currencies from all the countries of the world. The foreign exchange market is the largest market in the world with more than $4 trillion in daily trades.
The foreign exchange market operates 24/7 and in every time zone across the world.
Currencies are always traded in pairs. For instance, if an existing quote for Euros/Dollars are EUR/USD 1.2600, then that means that you are trading one Euro for 1.26 US dollars. This is also known as buying a euro and using 1.26 USD to pay for it. If a trader believes the Euro is going to strengthen against the dollar, then they would buy the EUR/USD currency pair.
A popular term in foreign exchange is “the majors”. The term is used when speaking about the world’s largest currencies that include the USD, the term “cross pair” is used when speaking about a currency pair that does not contain the USD.
EUR/USD AUD/USD USD/JPY USD/CAD USD/CHF GBP/USD
The major currencies constitute 85% of all forex trading.
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To learn more about FX trading conditions, please visit our Asset Index page.