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What is Forex Trading?

The simple answer is MONEY. Especially currencies.

Because you don't buy anything physically, forex trading can be confusing, so we'll use a simple (but not perfect) comparison to explain.

Think of buying a currency as buying shares of a particular country, such as buying shares in a company. The price of a currency is usually a direct reflection of the current view of the market and the future health of its individual economy.

For example, if you buy Japanese yen while trading forex, you are essentially buying a "part" of the Japanese economy.

Your bet on the Japanese economy is thriving and will improve over time.

Once you sell the "stocks" back to the market, hopefully you make a profit.

In general, the exchange rate against other currencies reflects the country's economic situation compared to other economies. By the time you finish this school of pipsology, you will be thrilled to start working with money.

Important currencies

While there may be many currencies you can trade with, as a new forex trader you are likely to start trading "important currencies".

They are called "major currencies" because they are the best-selling currencies and represent some of the world's largest economies.

Forex traders are different from what they consider to be "major currencies".

Uptights have a better chance of getting straight A and following all the rules, because children only count USD, EUR, JPY, GBP and CHF as the main currencies. They then referred to AUD, NZD and CAD as "commodity currencies".

For our rebels, and to make matters worse, we consider all eight coins to be "mayors".

Below we list them according to their symbol, the country where they are used, the name of the currency and great nicknames.

Currency symbols always have three letters, with the first two letters indicating the name of the country and the third letter the name of the currency of that country, usually the first letter of the currency name.

These three letters are known as ISO 4217 currency codes. In 1973, the International Organization for Standardization (ISO) introduced three-letter codes for the currencies we use today.

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