Forex Stands for FOReign EXchange, which deals in exchanging foreign currencies not by the way of centralized exchanging platform but conducted over-the-counter (OTC) electronically. It involves currency trading from different countries of the world. According to an analysis, almost $3 trillion or even more are traded everyday in foreign exchange markets which reveal the vastness of this trading venture. Everything is done via computers between traders sitting in different corners of the world. Major financial exchanges of developed countries (located in London, NY, Tokyo, Hong Kong, Singapore etc.) control this mega trading game during their specific trading hours.

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Forex exchange is 24 hours market with huge trading volume of $3 trillion plus every day. The reason is need for exchanging currencies for certain reasons or for enjoying profit generated after value of your currency increases in the market. That is why only 5% trade is done by companies/individuals for getting buying another currency for business needs while 95% trading is done just for making money due to the fluctuating value of various currencies possible throughout the day. Forex market carries highest liquidity due to its immense potential of generating profits within few minutes. Even stock market with around $2 trillion turnover everyday seems dwarf due to the huge volume of FX market.

Top Currency Pairs in Forex

Currencies are traded in pair in forex. The most traded currencies are called majors which are given below:

*US Dollar (USD)
* Japanese Yen (JPY)
* Euro (EUR)
* British Pound (GBP)
* Canadian Dollar (CAD)
* Australian Dollar (AUD)
* Swiss Franc (CHF)

For representing a currency pair, their abbreviations are used. Top currency pairs which are traded mostly throughout the world are given below in their abbreviated forms.

1. Euro and US Dollar (EUR/USD)

2. US Dollar and the Japanese Yen (USD/JPY) (The Gopher)

3. British Pound and US Dollar (GBP/USD) (The Cable)

4. USD/CAD

5. US Dollar and Swiss franc (USD/CHF) (The Swissie)

6. AUD/USD (The Aussie)

Forex trading is usually done by hiring a broker who places trade according to your preferences. Placing trades with the help of broker does not take more than few minutes. You just make preference and broker passes it to Interbank Market to create your position. As you close trades, your broker also closes your position in the market and credits the forex account with gain or loss of amount traded on that specific day.

Traders or investors interested in exchanging foreign currencies from all corners the world respond to fluctuations in major currencies and buy or sell currencies in an anticipation of generating instant profit for their investment. An investor prefers to buy a currency at lower rate and sells it with an increase in its value in market. In this way forex exchange becomes the most lucrative, huge money making market with immense potential of earning profit within a game of few clicks on approaching the desired value of certain currency.