On the Forex market (Foreign Exchange Market) Currencies are bought and sold in real-time. The Forex market is one of the largest of the world. Forex allows people to trade currencies and earn money by predicting the course of the value of currencies over a certain period of time. (eg 15 minutes after the original investment) One might expect that at for example at 4 PM the US Dollar will be worth more than the euro, and thus make money.
The Forex market is the world’s largest financial market and everyone from the age of eighteen can trade on the Forex market. Forex trading might be a bit complicated at first. But once you master the basics the ball will start rolling. The first thing to remember is that the first currency of a pair is always the “Base currency” And this is usually the US dollar.
Most traders will use the US dollar as their base currency and pair it with a different currency such as the Japanese yen. When we take a look at the exchange rate of the USD/JPY it could say 2.34 and this means that 1 US Dollar is worth 2.34 Japanese Yen.
Given that the US dollar is the base currency and the exchange rate goes up, the value of the dollar compared to its pairing will rise accordingly. If at the beginning of the time period the exchange rate is 2.34 and at the end of the time period it is 2.50, the Dollar has become more valuable. Sometimes the Dollar can also be the weaker currency – also known as the “counter currency” This is the case when the English pound or the Euro is paired with the US Dollar. (EUR/USD or GBP/USD)