What Is Forex & How It Works?

According to the definition given in The Economist’s guide to Financial Market, forex or forex exchange is a worldwide decentralization of the financial market for trading currencies. Here, financial centers across the globe act as anchors of trading between different types of buyers and sellers, and work 24-hour a day, 5 days a week.
To trade forex online, buyers and sellers exchange goods and services 24 hours a day worldwide. These transactions require payments in non-domestic currencies. Let’s understand this first. Suppose- a United Kingdom-based company purchases widget from a Mexican Company. In this particular transaction, one of two things will happen. The UK Company may make the payment in Mexican Pesos according the terms defined in the contract. It would require a conversion of dollars in Pesos to make the payment. Or, the UK company can make the payment in Dollars, and the Mexican company would then exchange the Dollars to Pesos itself. Either ways, some transactions will happens which takes Dollars and exchanges them for pesos.
The forex market defines an exchange rate between the US dollar and the Mexican Pesos to facilitate the transaction. It is a 24-hour over-the-counter financial market, where forex trading starts in Sydney, and moves around the worlds as the business day starts, first to Tokyo, London and then New York. 

Trade CFDs Online & Get an Extra Edge

CFDs are derivative products that allow users to trade on live market price movements , but  here, user do not actually own the underlying instrument on which the contract is built. You use these CFDs to speculate the future movements of market prices irrespective of the underlying markets, which are either rising or falling. A CFD, contract for difference, is actually an argument between two parties to exchange the difference between the opening price and closing price of a contract.
When you trade CFDs online, you can short (sell) to gain some profit from the falling prices. You can also hedge your portfolio to compensate any potential loss in value of your physical investment.
You do not have to use all your money to open this contract. Instead, you can leverage the trading, so that when the value of the whole contact dropped to a certain limit, the deal will close automatically. With leverage trading, you get more money to use for trading than your account balance as you can leverage what you have anytime, which means using what you have to increase the trade amount and profit when trading in the right direction of a currency pair. At the time of loss, the higher the leverage, the quicker your deal will close automatically.