Foreign exchange – sometimes also known as Forex or FX – refers to the global, over-the-counter (OTC) trading market where individual traders, investors, institutions and banks, exchange, buy and sell global currencies.
It is worth noting that Forex is one of the largest trading markets, with a global daily turnover estimated to exceed US$5 trillion. Forex trading is always done in pairs, in both spot and futures markets.
Value of a Currency pair
The value of a currency pair is driven by economic, political, and environmental factors, such as wars, natural disasters, or national elections. Trading is conducted through brokers such as LeoPrime, through which currencies are traded 24 hours a day, five days a week. At LeoPrime you can start trading using the Metatrader4 platform.
During the process of buying and selling currencies in order to make a profit, the price of one currency is linked to the price of another currency in a Forex trade. Because of this, you will always work with two currencies at any one time. The main currency is the first currency appearing in a currency pair quotation, followed by the quoted currency. The key difference in pricing between the currencies is where your profit or loss is.