Foreign exchange, or Forex for short, is the “place” where currencies are traded. Currency trading is the exchange of one type of currency for another. In the forex market, currencies are traded in pairs. When a trader buys a currency, he or she is selling another currency at the same time.
Currency values fluctuate based on various economic, political and environmental factors. Forex traders sell and buy currencies in an effort to take advantage of these changes in value. The forex market has no physical location or central exchange as it is a global, decentralized market and trades 24 hours a day, 5 days a week.
No other market in the world trades more than forex, which is why there are many opportunities for traders.
More on Beginner's Education
What Is Margin Call?
Margin Call is a notification which alerts you that you need to deposit more money in your trading account, or close losing positions, to free up margin. Margin Call is denoted as a fixed percentage, determined by the broker. You can find the Margin Call percentage in...
What Is Stop Out?
Since we have already covered Free Margin and Margin Call, it is now time to look at Stop Out. In forex trading, Stop Out is the level at which the broker starts closing automatically (“liquidating”) all of his least-profitable open positions in the foreign exchange...
