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Forex is the marriage between the term “foreign” and the term “exchange” and that means exchanging one foreign currency to another foreign currency. Going back to your story in Japan, if you have any money left in your pocket after spending some time in Tokyo –which I would doubt it because Tokyo is expensive! – you will go back to the currency exchange counter and notice that the rates have changed.
Let’s take an extreme example of a rate change, Lets say it changed from 100 to 80.
This means for every 10,000 yen, you will now get 125 dollars.That means you made 25 dollars in your time in Japan, without doing anything special and just by giving the currency market some time. It’s that easy. But don’t get too excited yet. These changes in the currency markets sometimes allow you to make money, and sometimes, “allow” you to lose money. Just like any other kind of investing and trading. What you’d be interested to know is that the foreign exchange market is the largest financial market in the world. It is on average 53 times bigger than any stock exchange market.
