Forex trading stands for foreign exchange trading. Trading currencies of different countries is now gaining a lot of attention in the world of investors. Foreign exchange signifies the currency of a nation. Just like stock markets, the value of foreign exchange also sees fluctuation in pricing as the currency of a particular country rises or falls in values, when compared to that of another country. The world of forex trading involves the largest sums of money every day.

Many people are under the misconception that only institutional investors can invest in forex markets. They also have the wrong notion that retail investors cannot do forex trading. However, given the fact that forex trading is done by thousands of retail investors all over the world every day, it is easy to see why this is not true. The most common currencies used for forex trading include the US dollar, the European Euro, the Chinese Yuan, the British Pound, and the Japanese Yen. Forex trading is always done in currency pairs. The most favored currency pair is the USD and EUR.

Forex trading occurs 24 hours a day unlike stock market trading, which can only be done during the hours when the stock markets are open. In forex trading, when you decide to sell a particular currency, you automatically buy the currency of another country in place of it, as trading is always done through currency pairs. Individual investors can learn the ropes of forex tradingeasily, as its rules are much simpler than the rules for trading in the stock market.