Forex is trading one currency against another. Many external factors move currencies, like interest rates and geopolitics. Because Forex does not involve owning the underlying asset but simply taking a position on its price movement, it’s much cheaper to buy and sell than directly-owned assets such as equities.
This means Forex is most commonly used for shorter term trades and day trading.
Because Forex can be used to take both long and short positions on an asset and uses leverage, less money is tied up in holding a position.
Forex traders use both fundamental and technical analysis to study financial markets.
