Short definition: Forex, also known as foreign exchange or FX, is the global decentralized market where currencies are traded.
Explanation: It is the largest and most liquid financial market in the world, where currencies are bought and sold against each other. The exchange rate between two currencies represents the price at which one currency can be exchanged for another. Forex trading involves speculating on the fluctuations of these exchange rates to potentially profit from the differences.
Example: If a trader believes the euro will appreciate against the US dollar, they might buy euros and sell dollars, hoping to profit from the euro’s rise in value.
Additional information (optional): Forex trading is conducted by a wide range of participants, including banks, corporations, governments, and individual traders. It operates 24 hours a day, five days a week, across different time zones, making it a highly accessible and dynamic market.