What is Forex Trading
Forex Trading 101: Spot Margin Foreign Exchange, FOREX or FX is an agreement entered into to buy one currency by selling (exchange) another at an agreed price.
Existing as an agreement between two parties Forex is described as being traded ‘Over The Counter’ (OTC). There is no central Forex exchange (such as a stock exchange) or physical location like other OTC products. Forex is unique in that it exists wherever two parties agree to exchange currencies which in modern terms is largely over computer networks and trading software.
The main objective of Forex trading is to achieve profits by speculating when one currency (bought currency) will appreciate in value while another depreciates (sold currency). Various factors such as news flow, monetary policy, economic conditions, international trade or political conditions will influence the value of a currency.