All the currency of the world is involved in the forex market. It may be confusing to choose which one to trade, but all you really need to know are the major currencies, which are the most frequently traded.
Here are the major currencies:
1.) U.S. Dollar (USD)
2.) Japanese Yen (JPY)
3.) British Pound (GBP)
4.) Swiss Franc (CHF)
5.) European Union Euro (EUR)
6.) Australian Dollar (AUD)
7.) New Zealand Dollar (NZD)
8.) Canadian Dollar (CAD)
The next thing you need to know is that forex is traded in currency pairs.
Trading currency pairs means you’re buying one currency while simultaneously selling another currency.
The most heavily traded products in the forex market are typically:
It’s very important for you to know that the forex markets are extremely volatile. You can easily make (or lose) thousands of dollars in a single day.
Many Forex brokers offer "free quotes and charts" and "no commissions," but keep in mind that nothing is for free. You are paying a spread – i.e. you CANNOT buy a currency and immediately sell it for the same amount.
It's like at the exchange booths when you’re on vacation: you might ex - change $100 into 80 Euro, but when you change the 80 Euro back into dollars, you only receive $96. The same concept applies when trading Forex: you’re paying at least 2 "pips." This amounts to approximately $20, depending on the currency pair you're trading.