What is Currency Trading?

Currency trading on the Foreign Exchange (Forex) market is the simultaneous buying of one currency and selling of another one. The currency pair used for the trade is called a cross. The most commonly traded currencies are referred to as the “majors”, these are; EUR/USD, USD/JPY, USD/CHF and GBP/USD.

Currency trading is performed for a number of reasons, some of the main reasons are;
- To profit from long-term or short-term trends and fluctuations
- Companies hedging their international commercial contracts, to ensure a certain profit is locked in when the contract is completed.
- Companies/Investors/Banks/Hedge Funds diversifying their wealth into different currencies to minimize the risk of a drop in their home currency affecting their wealth.

Currency trading can be performed 24 hours a day 5 days a week, through Forex Brokers.