What is Foreign Exchange or Forex

Foreign exchange is abbreviated as Forex or FX. It’s basically currency trading. Foreign exchange can be defined as purchase or sale of one currency against sale or purchase of another currency at an agreed price and date. Exchange rate in a way shows the purchasing power of one currency in another currency. After the globalisation Foreign Exchange has assumed a lot of importance.

The foreign exchange (FX) market is a multibillion-dollar market for monetary transactions associated with international trade and finance. In this market, people who need the currency of another country can obtain it in exchange for the currency they have. The foreign exchange market is the largest in terms of the daily transaction volumes and is the most liquid market in the world. Trading in foreign exchange happens in markets operating worldwide and 24 hours a day. FX market is not a physical market and transactions are done through internet enabled online system or over phone. The profit margins in Foreign Exchange is very less compared to other markets. But since the volume of transactions is heavy profits are generally high. Read more