What is Forex trading in plain words?
Forex trading is the trading of foreign currencies. Currencies like the U.S. dollar (USD), Euro (EUR), Canadian dollar (CAD), British pound (GBP), Australian dollar (AUD), New Zealand dollar (NZD), Swiss franc and many others freely float in value against each other in financial instruments known as currency pairs. For example, a commonly traded currency pair is EUR/USD, which pits the Euro against the U.S. dollar. When the Euro goes up in value against the U.S. dollar, EUR/USD will go up. When the U.S. dollar rises in value compared to the Euro, the EUR/USD will go down.