Market Overview Of Forex

Forex trading, also known as foreign exchange trading, involves the buying and selling of currencies on the foreign exchange market with the aim of making a profit.

Forex trading works by exchanging one currency for another at an agreed-upon price in the global over-the-counter (OTC) market. Traders speculate on the price movements of currency pairs, aiming to profit from fluctuations in exchange rates.

Major currency pairs are the most heavily traded pairs in the forex market and include combinations of currencies such as EUR/USD, USD/JPY, GBP/USD, and USD/CHF.

Leverage allows traders to control a large position in the market with a relatively small amount of capital. It magnifies both potential profits and losses, so it's important to use it with caution.

A pip, or "percentage in point," is the smallest price movement that a currency exchange rate can make. It is typically measured to the fourth decimal place for most currency pairs.