Forex trading involves the exchange of one currency into another by banks, individuals, and businesses. The forex market is the largest financial market in the world with trillions of dollars are exchanged everyday. There is no central exchange for trading forex. But stocks or commodities are traded on a central exchange.
Forex trading is done through a global network of banks, dealers, and brokers. As a retail forex trader, you can trade 24 hours a day, and from Monday to Friday. Prices are quoted in pairs. When you trade a currency pair, you buy one currency, and sell the other.
For example, consider the EUR/USD pair. Here, the euro is the base currency, and the US dollar is the quote currency. The difference between the bid price and the ask price is the spread. Forex prices are affected by various factors such as interest rates, inflation, government policy, employment figures, etc. Price movements can happen very quickly. making it one of the most volatile market in the world.