Forex is one of the largest and most popular financial markets. While thousands of traders worldwide have already created enough passive income on it, many people still don’t understand what it is. 

But don’t worry if you are one of them as in this article we are going to understand what is Forex and how it works so that it will be a good starting point in case you think of becoming a forex trader. 

Let’s start now. 

What is Forex?

Forex is a big marketplace where traders make deals by buying and selling foreign currency pairs. The biggest advantage is that the market is open 24 hours a day, 5 days a week, which means that people living in different time zones have the same opportunity to trade. Note that not only individuals can trade forex – many banks, companies, and businesses carry out the process of trading. 

How does Forex work?

To understand how the Forex market works, you can take as an example traveling abroad. When you travel to another country, you usually exchange the currency of your country for the currency of the country you travel to. 

The same thing is happening in the Forex market – you trade currency pairs by buying one and selling the other. You do this by guessing which currencies will go up or down in the future. Your main goal is to make a profit off these predictions.

There are ‘’the major’’ currencies that take part almost in any deal. That’s why it is important for everyone to get acquainted with them. The main 4 of them are:

  • US Dollar
  • The Euro
  • Japanese Yen
  • Pound Sterling
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‘’The majors’’ can impact your profit a lot, so you should pay attention to them first.

How to start forex trading?

Below are some simple steps you should do if you want to start trading in the Forex market:

  1. Choose a broker and open a brokerage account – as a beginner it will be better for you to trade via a brokerage company that will provide you with all the necessary tools. 
  2. Choose a currency pair – you can’t start a trading process without selecting a currency pair you want to trade.
  3. Choose a trading strategy – in case of any market changes a stable trading strategy helps to overcome everything.
  4. Set up a trading platform – a trading platform is a ‘’territory’’ where all the actions are carried out. The most common for forex trading is the MT4.
  5. Manage the risks – trade with the amount of money you can lose without sacrificing your usual lifestyle.


Forex trading is becoming increasingly popular, and it is not hard to see why. This type of investing can be lucrative if you know what you’re doing, and with a bit of practice, anyone can learn how to trade currencies successfully. 

The article introduced you to the Forex market, how it works, and where to start. So, once you have made a decision – start trading without wasting a time.

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Shirleen is a tech writer with over 3 years of experience in the industry. She has a passion for writing about complex technical topics in a way that is easy to understand. She is also an expert in SEO. She is a highly skilled and experienced tech writer who is passionate about her work. She is also a great team player and is always willing to go the extra mile to get the job done.

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