Forex trading implies forex currency trading. Forex trading helps buyers to buy the much needed currency for their business and encourages sellers to exchange their existing currency for the more convenient one. This trading market is the largest and busiest currency trading market in the world which always buzzes with activities. In this market, business dealings are done using a currency pair.
The exchange rate expressed as a ratio between the values of two currencies is the primary rate for trading forex. This rate is known to be forex rate. For instance, if we suppose a pair of currency is euro and US dollar and EUR/USD= 1.4086, then this forex rate implies that at a specific period of time one Euro is equal to 1.4086 times of a US dollar. You can find only 4 decimal places in this ratio. The digit at the extreme right of this ratio is referred to as ‘pips’.