What is forex trade market?

While share trading is relatively common across investors, Forex trading is growing in popularity. In Forex trading, you speculate on the exchange value of a currency to earn profits. In the forex market, currencies are exchanged in pairs.

Therefore, when you trade in forex, you speculate on whether one currency will fall or rise compared to the other. For example, when you trade in a USD-INR pair, you speculate on whether the USD will rise or fall, compared to the INR, and take a position accordingly.

When you trade in a currency pair, you will buy or sell the base currency in exchange for the quote currency. In a currency pair, the two currencies listed have the following format:

Base Currency / Quote Currency

So, in a USD/INR currency pair, the USD is the base currency, and the INR is the quote currency. When you trade in this currency pair, you buy or sell the USD in exchange for the INR.

A forex trader can take a long or short position in the market based on his/her analysis of the exchange rates. A long position is taken by a trader who expects the price of the currency purchased to rise, and a short position is taken by one who expects it to fall.

The most commonly traded currency pairs in the forex market are EUR/USD, GBP/USD, USD/JPY, and USD/CHF where, EUR: Euro, USD: The US Dollar, GBP: British Pound Sterling, JPY: Japanese Yen, and CHF: Swiss Franc.

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