The rate at which one currency is exchanged for another is called currency exchange rate. This is quoted in currency pairs, for example EUR/USD that is Euro and US Dollars. This is because you buy one currency and sell off the other. The exchange rate depends on the socio, economic and political factors of the respective countries, whose currencies are traded. The buying and selling rates are also influenced by these same factors. 

EUR/USD means the value of one currency required to buy another and are often quoted as bid/ask spreads. For example, in the EUR/USD spread of 1.2170/78 the first part of the quote called the bid price means one can sell one Euro for US$1.2170. The second part of the quote called the sell price means one can buy one Euro for US$1.2178. If the value of Euro increases against the US Dollars, then one can buy Euros with Dollars. One could then sell it off and make profits if the value continues to rise. 

Forex markets work twenty four hours a day. One can decide on when and how to trade currencies to make profit. There are different ways to trade in the Forex market. There is trading done in line with the overall trend, price reversals or trading range-bound markets. One can trade in leverage, but this increases the potential profits and losses.

Unlike the equities markets where there are thousands of stocks to choose from, there are very few currencies in the Forex trading. This makes it easier to select currencies in the Forex market. There are many firms which deal with Forex and the best thing being they do not charge commissions but expect the players to pay only the bid/asks spreads. One can begin trading in Forex with small amounts of money. 

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