Forex is foreign exchange.
OK, then, what is foreign exchange? I’m going to use this infographic, which is the first infographic in the book Infographcial Forex, to explain what foreign exchange is.
The foreign exchange market, which is more commonly known as forex or FX, is the largest financial market in the world. It exists because different countries have different currencies and the forex market makes it easy to exchange them. Companies need to do business in other countries and need to convert the currencies.
Forex is a Money Market. Money is the object that is traded.
When you buy a currency, you buy a share in that country’s economy using another country’s currency. The exchange rate between those two countries is a reflection of the country’s economic condition compared to the other country.
Forex is a global decentralized market for the trading of currencies.
The forex market has a daily trade volume of 5$ trillion. That’s five trillion dollars! Daily! Nothing else comes close in comparison. Now that figure is the total forex volume. The spot forex, or the retail portion, is about $1.5 trillion daily–more than 200 times the volume of the NYSE.
The best news for us is that because of the retail brokers, anyone can trade in this market.
In this video, I explain the question “What is forex?”
So there you have it–forex is the trading of money. High leverage is used to control large amounts of money with very little and, hopefully, gain a profit.
If you want more information on the book, Infographical Forex, that used in the video, check out this page:
After reading this visually stunning masterpiece, you will know the answer to the question, “What is Forex?”