The aim is to exchange one currency for another in the expectation that the currency you bought will increase in value compared to the one that you sold. Currencies are traded through a forex broker and the currencies are always quoted in pairs, for example (EUR/USD).

In any currency pair the base currency is the first one displayed and will be the one that is going up in value if the currency pair is going up and if the currency pair is going down then the base currency is weakening.

The most widely traded currency pairs are known as the ‘majors’ due to their volume and liquidity in the market. They are (EUR/USD) (USD/JPY) (GBP/USD) (USD/CHF)

You will soon learn that it is normally cheaper to trade with these pairs. Currency that trades against the U.S. dollar is the most popular because it is the most liquid and volatile. There are many different currency pairs to choose from however to get started with forex currency trading, you only need to concentrate on the majors.