What is Forex Trading?

The simultaneous purchase of one currency and the sale of another is known as Forex Trade.

Currency Pairs Buying and Selling

Currency pairs, such as the euro and the US dollar (EUR/USD) or the British pound and the Japanese yen (GBP/JPY), are exchanged through a broker or dealer.

You buy and sell currency pairs while you deal in the forex market.

Imagine each currency pair endlessly engaged in a tug-of-war, each on its own side of the chain. Exchange rates fluctuate depending on which currency is more powerful at any given time.

The Most Important Currency Pairs

The following currency pairs are referred to as "majors." They are the most often sold pairs and they all have the US dollar (USD) on one hand.

Euro Crosses

Yen Crosses

Pound Crosses

Other Crosses

Exotic Currency Pairs

One major currency paired with the currency of an emerging economy, such as Brazil, Mexico, or Hungary, forms exotic currency pairs. A few examples of exotic currency pairs are seen in the table below.

Since these pairs aren't as common as the "majors" or "crosses," the exchange costs of exchanging them are greater.