Forex trading, short for foreign exchange trading, involves buying and selling currencies like the US dollar, Japanese yen, and euro. By speculating on currency movements, you can potentially make a profit.

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How it Works

Imagine you're trading currency pairs, like USD/JPY (US dollar vs Japanese yen). If you think the dollar will rise against the yen, you can buy USD/JPY. If your prediction is correct, you can sell the currency pair later for a profit.

 

It's All Online

Unlike exchanging cash at a currency booth, forex trading happens electronically. You buy and sell currencies through a forex trading platform. Any profits you make are credited to your account, and you can withdraw them to your bank account.

 

Understanding the Basics: Currency Symbols

The forex market uses currency symbols for simplicity. So, USD represents the US dollar, JPY represents the Japanese yen, and EUR represents the euro.

The most commonly traded currencies are listed in the table below.