What is traded on Forex?
The simple answer is MONEY. Because you’re not buying anything physical, forex trading can be confusing so we’ll use a simple (but imperfect) analogy to help explain. Think of buying a currency as buying a share in a particular country, kind of like buying shares in a company. The price of the currency is usually a direct reflection of the market’s opinion on the current and future state of a country’s economy. In general, the exchange rate of a currency versus other currencies is a reflection of the strength of a country’s economy vs. other world economies. Every country has a currency. The major pairs are the four most heavily traded currency pairs in the forex market. The four major pairs are the EUR/USD, USD/JPY, GBP/USD, and USD/CHF.