Forex is a short term used for foreign exchange; a more exact definition is to trade one currency for another currency. This means you are buying one currency and selling another simultaneously in forecasting that you can generate returns from the exchanging values between the two currencies.

Merit between any two currencies is constantly changing and traders can look towards economic reports that are released periodically to identify which way the relationship between two currencies will move.

Forex offers traders the opportunity to profit from price movements ? prices moving up (long) or moving down (short). A Forex trade works like a contract between two parties (the buyer and the seller). It states that the seller will pay the buyer the difference between the current value of an asset and its value at "contract time". If the difference is negative, the buyer pays the seller instead.