Foreign exchange, also known as Forex or FX, is the market in which currencies are traded. The Forex market is the largest, most liquid financial market in the world, open 24 hours a day, five days a week. To put it into perspective, the New York Stock Exchange handles approximately $169 billion worth of transactions a day, while the Forex Market sees over a colossal $5 trillion worth of transactions a day.

Forex is traded in currency pairs. Common currency pairs are the Euro/US Dollar, US Dollar/Japanese Yen, Great British Pound/US Dollar, and Canadian Dollar/US Dollar. You buy one currency and automatically sell another. The goal is to make a profit by buying and selling currencies as their value increases and decreases. There are many economic factors that contribute to currency movements which traders and dedicated analysts alike attempt to decipher.

In each pair, the first currency is the base and the second currency is referred to as the counter. So in the EUR/USD example given above, you are using USD to purchase EUR, regardless of the currency your trading account is in.

When trading the currency, your broker will convert your existing currency into USD, and then use that to buy EUR. When buying a currency pairing, you take what is known as a "long position," and when selling you take a "short position."

It is important to have an understanding of the current climate of the currency market. If you believe people are going to sell bitcoin, for example, then this will bring the price down in relation to the USD.

We provide regularly updated information on many popular pairings, and we include the popular Bitcoin cryptocurrency in this currency index.

The majority of Forex traders focus on the following currency pairs: EUR/USD, USD/JPY, GBP/USD, and USD/CHF are the main four, followed by USD/CAD, AUD/USD and NZD/USD. All other pairs are just different combinations of the same currencies.

Unlike the stock market, the Forex market is not tied to a central exchange. Transactions are conducted between two counterparts over the telephone or via an electronic network, therefore the Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market.

What tools do I need to trade Forex?
You only need a computer with internet connection and a free demo account or a funded live account with Admiral Markets to start. However, you should be equipped with proper Forex education and tools to minimize risks in the Forex market.