What is forex trading?
Forex trading is when a person or institution buys and sells actual currencies, depending on the rate of the quote currency relative to the base currency (see below).

What is forex?
When you go on holiday and buy the local currency, you will probably spend your time converting the currency in your head back into your home currency so that you can decide whether you are getting a ‘good deal’ or not. This is the exchange rate or forex rate – an acronym for Forex Exchange. This rate will affect your ‘good deal’ outcome.

What is forex option trading?
Forex options trading is when an investor enters into a contract to buy or sell the currency at a fixed price at a set time in the future. They are not buying the currencies themselves but rather they are buying a contract which is affected by the currencies’ performance. A forex options trading investor can easily become a successful trader by gaining knowledge of different currencies and their likely movements relative to one another.

How is it represented?
Forex is represented in pairs e.g. USD/EUR, GBP/JPY. The first currency is known as the ‘base’ currency and has a value of 1. The second currency is known as the ‘quote’ currency. Its value shows how much of the quote currency is needed to buy one unit of the base currency.
Here’s an example: you are from Italy and holidaying in the USA so your currency pair is USD/EUR = 1.42958 which means that it costs 1.42958 Euros to buy 1 US dollar. If the USD strengthens then the number 1.42958 will increase, so you will need more Euros to buy one USD. Similarly, if the USD weakens then the number 1.42958 will decrease and it will take less Euros to buy one USD.

What does this mean for me?
In the example of your holiday, if you were in the USA and the USD weakened then you would benefit by receiving more dollars for your Euros.

How can I profit from forex?
To profit from forex you can purchase a forex binary option. You can monitor a currency pair and purchase a forex binary option based on which currency you think will grow stronger. If you think the quote currency will go stronger then you can purchase a Call forex binary option. If at the expiry time, your quote currency has indeed risen then your option will be in the money. You will then receive the payout offered on the online trading platform. If you think the quote currency will be weaker then you can purchase a Put forex binary option. If at the expiry time, your quote currency has indeed fallen then your option will again be in the money.