What is Forex trading?

Currency trading or forex trading is the simultaneous buying of one currency and selling of another.

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What is foreign exchange (FX) trading?

Currencies are quoted in pairs, for example, euro / US dollar, and investors can speculate on changes in the relative prices between the currencies. When one currency in the pair increases in value, it strengthens against the other. Currency trading is a popular way to trade on financial markets as it is a truly 24-hour market. Foreign exchange trading opens at 9pm on Sunday evenings and trades continuously through until 10pm on Friday evenings (GMT).

With currency pairs, the first currency is quite often referred to as the base currency and the second currency is referred to as the quote currency. In any price quote, the figure tells you how much you would receive of the quote currency for one unit of the base currency.

For example, a quotation of EUR/USD 1.36568 means that one euro is exchanged for 1.36568 US dollars.