What is Forex?

Forex, also referred to as foreign exchange, FX or money trading, is a decentralized global marketplace where all of the world's currencies trade.

All the world's combined stock markets do not come close to this.

However, what does this mean to you personally?

Take a closer look at forex trading and you might get some exciting trading opportunities available with other investments.

To have a full trading you can use Forex VPS.

If you have ever traveled overseas, you've made a currency transaction.

Take a trip to France and also you convert your pounds into euros.

Whenever you do this, the forex exchange rate between both currencies - based on supply and demand determines the number of euros you get on your pounds.

And the foreign exchange rate fluctuates continuously.

A single pound on Monday can allow you to 1.19 euros. On Tuesday, 1.20 euros.

This tiny change may not seem like a huge deal. But consider it on a bigger scale.

A big international company might want to pay overseas employees.

Imagine what that can do to the bottom line if, like in the case above, simply buying one currency for another costs you longer depending on if you take action?

These couple pennies add up quickly. In both cases, you as a traveler or a business proprietor - might choose to hold your money until the forex rate is much more favorable.

Just like stocks, you can trade currency based on which you think its value is (or where it's headed).

Nevertheless, the huge difference with forex is you can trade up or down just as easily.

If you think a currency will likely increase in value, you can get it.

If you think it will decrease, you may sell it.

Having a market this big, locating a buyer once you're selling and a seller once you're purchasing is much easier than in other markets.

Perhaps you hear about the news that China is devaluing its currency to draw more overseas business into its country.

If you believe that trend will continue, you can make a foreign exchange trade by selling the Chinese currency against another currency, say, the US buck.

The greater the Chinese currency devalues against the US dollar, the greater your profits.

If the Chinese currency increases in value at the same time you've got your sell position open, then your losses increase and you wish to get out of the trade.