Forex is an abbreviation of Foreign Exchange (also sometimes referred to as FX). A Forex is a place where world currencies are traded. It's a place where you can buy and sell pounds (sterling), the Euro, US Dollars, the Japanese Yen and many more of the world's currencies.
When you buy currency, you are effectively taking part in two forex trades - consisting of buying and selling a base currency and a counter currency.
People buy and sell currencies hoping to make a profit on currency movements. You make a profit when you are able to correctly determine which currency will increase in value by the end of a predetermined period. Unlike the London Stock Exchange, the Forex market is open 24 hours a day from Monday to Friday. It is based in four major world cities - Sydney in Australia, Tokyo in Japan, New York and London. Anyone over the age of 18 can trade on the Forex market, although users resident in the US are not accepted on this site.
Initially, the idea of Forex trading may sound a little daunting. However, it is much easier to understand than buying and selling shares and people with little experience in economics can be successful. It is certainly exciting and entertaining, and is filled with opportunities.
For example, in a "bear" market, all shares are falling to a certain degree. However with currencies, if one currency is falling, another is always rising. Therefore there are always opportunities where the wise can make money.
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