The modern-day Forex market began in the early 1970's after the fluctuation of currencies were allowed to float freely. Foreign Exchange (or 'Forex' for short) is quite simply a market where you are able to exchange one currency for another. When you ‘sell' a currency, there is a buyer for that currency somewhere else. The rate of exchange between those two currencies is what's important when trading Forex - it is constantly fluctuating and it is through this fluctuation that traders are able to earn money.
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