Forex or FX is the short form of “Foreign Exchange” which refers to the conversion of one currency into another.

Forex trading allows investors to take advantage of fluctuations in the currency market. Just like any other form of speculation, you want to buy a currency at one price and sell it at a higher price in order to make a profit.

Forex is the world’s largest form of exchange, with an estimated 10 million people trading currency every year. Trading is conducted over the ‘interbank market’, an online channel through which currencies are traded 24 hours a day, five days a week. It’s open to major institutions and individual investors alike.

On the Forex market, trades in currencies are often worth millions, so small bid-ask price differences can soon add up to a significant profit. Of course, it’s also important to remember that it’s also possible to accrue serious losses when trading large volumes.