Forex means foreign exchange and it's the selling and buying of one currency for yet another. This is a worldwide market and it's heavily traded. Conversion of currency is a requirement as you make online purchases as well as when you're visiting new countries.
There are a few things one should know about this currency market to be able to make an informed decision towards Forex trading.
How trading is done
In this market, the currencies are always traded in pairs. For all the transactions, it's necessary to have two currencies being exchanged. This is where the term currency pairs come from. This is done so as to show clearly, what the cost of a currency is relative to the other.
Symbols are used to represent the currencies. Every country has its own symbol that's used in the trading. This is necessary because the different currencies have different values against each other. Each pair in the Forex market comes with a market price that's associated with it. This is the price that indicates just how much it takes one currency to exchange against another.
it's easy to find out how much of one currency is needed to purchase another. So as to do this, you'll have to flip that pair. So as to come up with the rate, you've to divide using the prevailing rate. When this is done, you'll be able to feel how much of a currency is needed to trade for another using its current price in the market. This price keeps on fluctuating because the transactions keep on happening all…