What is forex trading

Forex is the bigest financial market in the world. The foreign exchange (currency or forex or FX) markets are the markets where one currency is trade for another currency. It includes trading amongst central banks, large commercial banks, large companies, multinational corporation and governments with the largest currency trader. But the currency markets are also traded by individual day traders.

Currency markets are unique in that they are not traded at exchanges, but are traded directly between traders instead. Foreign Exchange Trading is simply the purchase and sales of currency based on the strength of the currency and the fluctuation in the value of that currency. The trader’s goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs in other words will always trade a combination of two currencies.

Profits showed in pips is probably the most commonly used indicator of a system’s performance, and most forex traders talk about number of pips made per month. Besides, everyone is trading a different sized float, so pips per month is one way of comparison systems.