The Forex Dream provides content for informational and educational purposes only, not financial advice.
The Forex Dream provides content for informational and educational purposes only, not financial advice.
A swap (also called a rollover fee) is interest paid or earned when you hold a trade overnight (past 5:00 PM ET). You pay or earn swap depending on which currency has the higher interest rate.
A free-floating currency moves up and down freely, based on what traders, investors, and central banks think it’s worth. In Forex Trading, free-floating currencies are what you trade daily: USD/CAD, EUR/USD, GBP/JPY.
Correlation in forex measures how similarly or oppositely two pairs move. It ranges from:
+1.00 = move together (positive correlation),
-1.00 = move in opposite directions (negative correlation), and
0.00 = no clear relationship
Forex trading is predicting whether one currency will go up or down against another. If you're right, you make a profit. If you're wrong, you lose money.
Forex is short for foreign exchange. It simply means changing one currency into another, like when you travel and exchange your local money for another country’s currency.