In it's simplest terms, Currency traders (traders), bet on currency exchange rates between specific countries. These rates can change by the minute and are based on many factors. The Forex is a completely level playing field. No one gets information ahead of time. Successful traders have systems and indicators that help them to recognize a change in direction for a certain currency and act on it proactively. It takes time and study to learn how to develop this speculative talent.

The most telling impact on currency in a country can be seen by the people of that country. Wars, arms, a death of major leaders, all affect the currency exchange rate. The global economy is affecting currency exchange rates around the world. Individuals who are speculating on when this currency will change direction have an opportunity to see significant gains in their portfolios or to lose substantially.

You will read a lot about "pairs" when you are learning about Forex. The USD is in all of the major pairs that are traded on Forex. When you see "pairs" alone, it is referred to USD/XX (The US dollar/Somebody else's currency). When currency is traded that does not involve the USD, it is a "cross currency pair." EUR, JPY, and GBP are the most actively traded cross currency pairs. EUR/JPY (Euro/Japanese Yen) is an example of a cross currency pair.

If you though that the way that the currency is written and listed wasn't that important, think again. The stronger currency is traditionally shown on the left. When you see EUR/USD, it means that the Euro is stronger than the US dollar. The currency that is listed on the left is the "base currency." Whatever happens on the left creates the opposite action on the right. So, if you buy 100 EUR, you automatically sell 100 USD.

"Secondary currency" or "counter currency" is the currency on the right. This currency will determine your gains or losses when you trade. For instance if you buy 100 EUR and simultaneously sell 100 USD, you have made +50. Why? Because the EUR is worth 100 and the USD is worth 50.

There are thousands of these trades taking place every minute of every day. The rates move and fluctuate very quickly. Your success as a trader depends on your ability to read market fluctuations and make trades proactively. You will find pairs that are extremely high risk and pairs that are very low risk. Knowing the how much risk you can afford to take will determine which pairs you focus on in trading.