Forex trading in simple terms can be defined as the simultaneous exchange of one countries currency with another. Forex market is one of the largest in the world with daily average volume greater than 5 trillion USD. It is very liquid and active market as there is no central place for it, currency is traded everywhere in the world and in all time zones.
The US Dollar (USD) is the most traded currency, followed by Euro (EUR), the other major currencies are Canadian dollar (CAD), Japan Yen (JPY), UK Pound (GBP), Swiss Franch (CHF), Australian Dolar (AUD), New Zealand Dollar (NZD).
The currencies are traded in pairs. The most important being
EUR/USD - Euro vs United States Dollar
USD/JPY - US Dollar vs Japanese Yen
GBP/USD - Great Britain Pound vs US Dollar
AUD/USD - Australian Dollar vs US Dollar
USD/CAD - US Dollar vs Canadian Dollar
USD/CHF - US Dollar vs Switzerland Franc
USD/HKD - US Dollar vs Hong Kong Dollar
EUR/GBP - Euro vs Great Britain Pound
USD/KRW - US Dollar vs South Korean Won
The first currency in the above pair is labelled as base currency and the other as quote currency. e.g. USDCAD shows how much CAD is needed for 1 USD.
The minimum unit for a currency trade is called a Pip.
1 Pip = 0.0001 or 1/10,000
The quote is shown as Sell & Buy prices. e.g.
USDCAD, Sell = 1.31610 and Buy = 1.31635
That is a spread of 1.5 pip
The forex is typically traded in margin, which can be 1:20 to 1:200. So investor puts in $1 and forex agency multiplies that by $20 and then buys the currency. There is a take profit & stop loss limit should always be entered in the trade as the market is very volatile & active.Investor can trade in multiple currency pairs and can use both long & short strategies.
There are lot of exchange available to investors throughout the world to trade in the currency market.
Oanda is one of the many that can be used.
Others are Forex.com
How to start training in FOREX