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Forex, or foreign exchange, can be explained as a network of buyers and sellers, who transfer currency between each other at an agreed price. It is how individuals, companies, and central banks convert one currency into another – if you have ever traveled abroad, then it is likely you have made a forex transaction.
While a lot of foreign exchange is done for practical purposes, most of the currency conversion is undertaken with the aim of earning a profit. The amount of currency converted every day can make the price movements of some currencies extremely volatile. It is this volatility that can make forex so attractive to traders: bringing about a greater chance of high profits, while also increasing the risk.
Financial centres around the world function as anchors of trading between a wide range of different types of buyers and sellers.