Step 1. What is Forex?
Forex, or Foreign Exchange is an unregulated market, also known as OTC (Over-the-counter) and is the biggest market with average daily turn-over that runs into billions. It is even bigger than the US stock markets. Although due to its OTC nature, no one can really give the correct numbers as to the forex turnover. But nonetheless, forex is indeed a big market and thus allows many market participants. From your neighborhood bank to specialized investment companies, to your friend; the forex markets always offers a piece of the action whoever you are and wherever you are (even from your home).
The basic concept of trading forex is very simple. You trade or speculate against other traders on the direction of a currency.
So, if you believe that the Euro is going to rise, you would BUY the Euro, or SELL the Euro if you think the Euro would fall. It’s as simple as that.