What Is Forex

Forex (or FX) is short for Foreign Exchange Market. The fundamental idea is to exchange one currency for another to gain profit. If you have exchanged currencies before, you know that as a result of the exchange you either gain or lose money. It depends on how one currency gained more value than the other since your purchase.

 

What is a Currency

A currency is money used as a medium of circulation, such as banknotes and coins. 
Some examples of currencies are the US dollar, the Euro, the British pound and the Japanese yen, which all act as a store of value and which are traded on the global foreign exchange market (Forex).
Just like other assets, the forces of supply and demand determine the value of a currency relative to another currency. Increased supply of a currency sinks its value, while increased demand pushes its value up.