Forex is short for Foreign Exchange and cannot be compared with the shares (like Nasdaq). The currencies are traded between the central bank and the brokers. Currency can be traded in pairs, like EUR/USD. EUR is the basic and USD the second. This means that EUR/USD can be 1.3000 where one EUR is 1.3000 USD.Forex products prices are displayed with two or four decimals (e.g. €/$ 1.12 or 1.1234). The decimal holds the name “pip”. To be able to trade on the Forex Market, you'll need an account. The brokers can give you access to the market and offer different account types. A minimum deposit of $25 to $25,000 is required, when you like to enter the market with real money.
The winning and losing of money by buying or selling currency, is displayed in pips. If you, for example, win five pips (1.3000 to 1.3005) and you own 100,000 pairs, you'll win $50 (0.0005*100,000). We advice you, as a starter, to only deal with small pairs.
To read and learn more about the market, check our Forex tutorials or join the lessons from your Forex broker.
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