What is Forex? (The Easy Explanation)

Imagine you're traveling to another country. You need their money to buy things, right? So you go to an exchange booth and swap your home currency for theirs. That’s essentially what Forex{" "} is – but on a massive scale!

Forex (short for Foreign Exchange) is simply the{" "} global marketplace where different countries' currencies are traded. It's the{" "} biggest financial market in the world !

Who Uses Forex and Why?

• Tourists & Businesses: Just like our travel example, companies doing business worldwide need to exchange money. For example, an American company selling in Europe gets paid in Euros, but needs US Dollars to pay employees at home.
• Traders (Like You!): Many people aim to make profit by predicting if one currency will get stronger or weaker compared to another. It’s similar to buying stocks you think will rise in price, but instead, you’re trading currencies.

How It Works: Trading Currencies

Currencies are always traded in pairs. Think of it like this: when you buy Euros, you’re also selling US Dollars.

The 24/5 Market

Unlike the stock market that closes daily,{" "} Forex is open 24 hours a day, 5 days a week (Monday to Friday). Why? Because when one part of the world sleeps, another part wakes up and starts trading! This means{" "} you can react to news instantly, anytime .