What is FX trading?
Currency trading, or foreign exchange trading, is the simultaneous buying of one currency and selling of another.
Currencies are quoted in pairs, for example, euro / US dollar, and investors can speculate on changes in the relative prices between the currencies. When one currency in the pair increases in value, it strengthens against the other. Currency trading is a popular way to trade on financial markets as it is a truly 24-hour market. Foreign exchange trading opens at 08:00 Sydney Time on Monday and trades continuously through until 08:00 Sydney Time on Saturday.
With currency pairs, the first currency is quite often referred to as the base currency and the second currency is referred to as the quote currency. In any price quote, the figure tells you how much you would receive of the quote currency for one unit of the base currency.
For example, a quotation of EUR/USD 1.2922 means that one euro is exchanged for 1.2922 US dollars.