What is Forex? What is trading?

Trading is the act of buying something with the expectation of selling it later at a higher price — or selling it first and buying it back cheaper. That is the entire business, whether the thing you trade is a currency, a barrel of oil, a share, or a bitcoin.

Forex (short for foreign exchange, also written FX) is the market where the world's currencies are exchanged. Every time a company pays a foreign supplier, a tourist buys euros, or a fund hedges a bond position, a currency trade happens. Roughly $7.5 trillion changes hands every single day, which makes it the largest financial market on earth.

You never buy a currency in isolation — you always buy one and sell another at the same time. That is why prices are quoted as pairs like EUR/USD. The first currency is the base, the second is the quote.

• Long (buy): you expect the base currency to rise against the quote currency.
• Short (sell): you expect the base currency to fall. In forex, shorting is as normal and as easy as buying.
• Your profit or loss is the difference between your entry and exit price, multiplied by your position size.

Price is simply the point where buyers and sellers currently agree. When more money wants to buy than sell, the price rises. Interest rates, inflation data, central bank statements, growth figures and geopolitics all change how much money wants to be on each side.