The Foreign Exchange market is the biggest market in the world with more than $5 trillion in daily volume.
The Foreign Exchange market (Forex, FX, or currency market) is the most extensive and decentralized market in the world. With participants from all over the world, the Forex markets are a place where novice and experienced traders meet daily to benefit from the changes in the market.
The market is structured by the most important international banks that provided exchange rates for all global currency pairs based on their offer and demand. Using these volatiles rates, banks, hedge funds, and all kinds of investors participate in the markets by selling or buying different currency pairs.
The diversity in traders and news events gives life to the markets and generates volatility, thereby giving traders opportunities to make money by either going long or short on each currency pair. When a trader “goes long” on a position, he or she is buying the main currency pair and selling the crossing pair. For example, if a trader is going long on EUR/USD, he or she is buying EUR and selling USD. When a trader “goes short” on a position, he or she is selling the main currency pair and buying the crossing pair. It’s the opposite of a long trade.
The Forex market includes all possible currency pair crosses, and provides direct access to investors around the world so that they can speculate or hedge on the market’s volatility.