What is FOREX?

FOREX stands for FOreign EXchange.

Forex is the global market that allows the exchange of one currency for another. It is the largest financial market in the world, with its $5 TRILLION a day of trade volume. 200 times bigger than the stock market.

If you’ve ever traveled to another country, you usually had to find a currency exchange booth at the airport, and then exchange the money you have in your wallet into the currency of the country you are visiting.

1. You go up to the counter and notice a screen displaying different exchange rates for different currencies.
2. You find “Japanese yen” and think to yourself, *“WOW! My one dollar is worth 100 yen?! And I have ten dollars! I’m going to be rich!!!” *
3. When you do this, you’ve essentially participated in the forex market! You’ve exchanged one currency for another. Or in forex trading terms, assuming you’re an American visiting Japan, you’ve sold dollars and bought yen.
4. Before you fly back home, you stop by the currency exchange booth to exchange the yen that you miraculously have left over and notice the exchange rates have changed.

It’s these changes in the exchanges rates that allow you to make money in the foreign exchange market.

Luckily, today, you don't have to travel abroad to participate in the Forex market. You do it online.