When you see the word Forex in reference to Forex trading, that simply means it’s referring to the Foreign Exchange. You might also see it mentioned as plain Forex, as FX or as Forex market.
Forex trading is when a trader buys one currency pair while at the same time selling another. A currency pair is exactly what it sounds like. A pair of currency. Forex trading is usually done with the major currency pairs and those pairs are: GBP/USD, EUR/USD, USD/CHF, USD/JPY.
While you’re learning about Forex trading, you might come across the term ‘Spot’ or ‘Spot Market.’ In Forex trading, this term is one you want to pay attention to as it means the transactions are wrapped up faster, in a shorter amount of time.
Another important term you should know about when dealing with Forex trading is margin. You may hear it referred to as ‘trading on the margin.’ Margin is the amount of money you have to put up.
When you’re trading on the margin, you’re trading with more than you have actually have in your account. When you want to participate in Forex trading, take the time to know as much as you can about the Forex market. That knowledge will reward you in the end.
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