ELI5: forex trading

// eli5

What is forex trading?

Forex trading is when you buy and sell different countries' money, kind of like trading baseball cards but with currencies like dollars and euros [5]. People do this because the value of money changes all the time, so you can buy cheap and sell expensive to make money [5].

Why do people do it?

Just like how the price of toys goes up and down at different stores, the price of one country's money compared to another country's money is always changing [5]. Traders try to guess which way the price will go and make money from the difference [5].

When can you trade?

Forex markets are open almost all the time - nearly 24 hours a day, five days a week, so people can trade whenever they want [1]. This is different from stock markets that only open during certain hours.

How do you get started?

You need to sign up with a forex broker (a company that lets you trade), which you can do online on your computer or phone [2]. Before you start, you should learn a lot about it and understand the risks [3].