Forex Trading - What is Forex Trading ?

We all have heard the term Forex Trading .But so many people dont know what is Forex Trading .

Here i will give a Simple definition of Forex Trading ( FX or Forex or Currency Market ) .

Forex Trading is the process of Exchanging Currencies or trading Currency .

The currency is exchanged (bought and Sold) as part of Trading.


I will tell you with an example.


Suppose i am Buying 1$ Dollar from a foreign exchange Trader when Dollar to Rupee exchange rate is 1:39

ie One Dollar is equal to 39 Rupees. ( 1$ = 39 Rs )


So what will i do is - I will buy 1 $ from that trader giving 39 Rs.

Now i have 1 $ with me.

After 2 months what happens is that some times the Dollar to Rupee Ratio will increase or decrease.

Suppose that the Forign Exchange Ratio increased.

Suppose the exchange ratio became 1:50 (ie 1 Dollar is equal to 50 Rs)


So now if i exchange my dollar for Rupee then i will get 50 Rs

So i gave 39 Rs to Buy 1$ and now i will get 50 Rs when i sell that Dollar.

Now i got Profit . This is the Basic Principle of Forex Trading.

The definitions given on web is very complicated . So i tried to explain Forex Trading in simple terms so that all people can understand.

And one more thing. This Exchange is done between people of different countries.

Hope you all got now " What is Forex and Forex Trading ? "

Thank You.