Forex known as Foreign Exchange Market or referred to as FX or spot Market is the largest Financial Market in the world with a volume turnover of over $6.6 Trillion in a day. What is traded on the Foreign Exchange Market is MONEY. Forex Trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a Broker and are traded in PAIRS ie USDKES, EURUSD etc.In the stock Markets, we trade the value of companies while in the Foreign Exchange Market we trade the value of countries (Economies). The exchange rate of a currency versus other currencies is a reflection of the condition of that country’s economy compared to other countries’ economies.Forex currency symbols are represented in THREE LETTERS where first two Letters identify the name of the country and third Letter Identifies the name of that country’s currency e.g. KES Where KE is Kenya and S is the Shillings. Others entail ; EUR(Euro), USD(Dollars),JPY(Japanese Yen),CAD(Canadian Dollar),CHF(Franc),NZD(Newzeland Dollar), CAD(Canadian Dollar),AUD(Australian Dollar, GBP(Sterling Pound). To get a list of all world Currencies, visit here to see the world currencies. There are two forms of forex trading: Offline Forex Trading and Online Forex trading.

Most people are well acquainted with offline forex trading where one does exchange their local currency with a foreign currency or a foreign currency with a local currency. In this line also, most people understand that there is a buying price and also there is a selling price. For example here in Kenya, the buying price for USD can be quoted as ksh 100 and selling price as ksh 102. This means that if I want to exchange my $1,000 for ksh, the person I will meet in the forex bureau I visit will give me ksh 100,000 because they are buying 1 usd at Kes 100. If after exchanging my USD for Kenya shillings I have a need that requires payment with 1000 USD and I do not have any other money in dollars, it means I would have to go back to a forex bureau and exchange my kenya shillings for the dollars. If the exchange rate is still the same, buying one USD at Kes100 and selling at 102, it would mean that to get $1000 usd, I need kenya shillings 102,000. Since what I got in my first instance was kenya shillings 100,000 I would have no option than to add ksh, 2,000 to get $1,000.In other words, the forex dealer exchanging the money for me in this case would make a profit of ksh 2000. That’s a good profit... considering the fact that they get so many of these kinds of exchanges.

Online currencies are traded through forex brokers and done in pairs; for example the British pound and the Japanese Yen (GBP/JPY) and the Euro dollar and the US dollar (EUR/USD).Online Forex trading is also referred to as the “FOREX” or “Retail forex” or “FX” or “Spot FX” or just “Spot”, or simply stated as the Foreign Exchange market. Currencies are traded at Foreign Exchange Market, the same way stocks/Shares are traded at a stock exchange. The foreign exchange market is also known as Spot Market. Unlike stock markets, Forex has no physical location but a worldwide electronic network of Banks, brokers and other intermediaries.

The aim of every business is to make profit, so how do you make money in forex? It is very simple, you buy Low and Sell High. In the stock markets eg Nairobi Securities Exchange, as an investor or trader, you will look to buy cheap stocks in anticipation of the stock rising in value. The same concept is also used in forex trading. Actually in Stock Market, stock trading is simply trading the value of a company or companies while in Forex trading you are trading the value of an economy or economies. Currencies are traded in pairs because you need a currency to acquire another currency. For example, If I need Dollars, I will need Kenyan shilling to Buy dollars. Basically Forex trading is the simultaneous buying of one currency and selling another. Forex market is highly liquid and runs 24hours for seven days in a week. However, retailers only trade for 5 days in a week, over the weekend, the business is left for the "big fish" and that’s why on Sundays at times the market opens with Gaps.

Forex is traded 24hours a day for 5 days in a week.There are four sessions:

We have four Trading Sessions in Kenyan Time (GMT +3):

No	TIMEZONE	SUMMER	WINTER
1	Sydney Open	0100hrs	0000hrs
	Sydney Close	1000hrs	0900hrs
2	Tokyo Open	0200hrs	0200hrs
	Tokyo Close	1100hrs	1100hrs
3	London Open	1000hrs	1900hrs
	London Close	1100hrs	2000hrs
4	New York Open	1500hrs	1600hrs
	New York Close	0000hrs	0100hrs

Note: When two sessions are overlapping due to the high volumes. These are also the times where major news events come out to potentially spark some volatility and directional movements. The London session tends to be the busiest out of the three, mostly traded and with the highest volume traded.

These are mostly frequently traded pairs and Contain USD (Dollar):

PAIR	MEANING
EUR/USD	Euro – US dollar
USD/JPY	US dollar – Yen
GBP/USD	Pound sterling – US dollar
USD/CHF	US dollar – Swiss franc
USD/CAD	US dollar – Canadian dollar
NZD/USD	New Zealand dollar – US dollar
AUD/USD	Australian dollar – US dollar

These are currency PAIRS that don’t contain Dollar (USD):

EURO MINORS	YEN MINORS	POUND MINORS	OTHER MINORS
EUR/CHF	EUR/JPY	GBP/CHF	AUD/CHF
EUR/GBP	GBP/JPY	GBP/AUD	AUD/CAD
EUR/CAD	CHF/JPY	GBP/CAD	AUD/NZD
EUR/AUD	CAD/JPY	GBP/NZD	CAD/CHF
EUR/NZD	AUD/JPY		NZD/CHF
	NZDJPY

Exotic pairs are made up of one major currency paired with the currency of an emerging economy, such as Brazil, Mexico, or Hungary:

PAIR	MEANING
USD/HKD	US dollar – Hong Kong dollar
USD/SGD	US dollar – Singapore dollar
USD/ZAR	US dollar – South African rand
USD/THB	US dollar – Thai baht
USD/HUF	US dollar – Hungarian forint
USD/MXN	US dollar – Mexican peso
USD/DKK	US dollar – Danish krone
USD/SEK	US dollar-Swedish Krona