Forex trading is a big industry. Every day, people all over the world shell out a total of 1 trillion dollars and use that money for millions of transactions. Back in the 80s, not many people knew about it, much less engaged in it. In fact, only people in financial institutions like banks and investment houses are familiar with it. But now, because of the world wide web, people are able to make transactions across countries, all over the globe. The internet has made it more accessible to ordinary people. But forex trading being accessible does not mean that it is easy to do. In fact, some people still do not understand what this trade is all about. With such a complicated name, most of them do not even try to understand what it is. Forex trading is the trading of foreign currencies for profit. This means that currencies are bought at a lower rate and then sold at a higher rate with the intent to make profit from it. But because currencies are not stable, this does not always happen. Just as it can go up, it can also go down. In fact, currencies are one of the most volatile investment options in the world. Their values fluctuate several times in a day. Some people take advantage of this volatility to earn a little extra. This is done by buying and selling several times in a day and then adding up the small profits at the end of the day. This practice is called day trading. Although people can essentially make a profit this way, experts discourage this kind of practice because it can create artificial demand for currencies that are not actually there. This can drive up or down the value of the currency that will not be based on economic markets. In truth, a lot of factors can make an impact on the value of a foreign currency. One of the most important is the economic performance of the country carrying the currency. The better the economy, the stronger the currency will be. Another factor is the current policy of the government on interest rates and of course in the value of their currency. You see, the government can dictate what their currency should be valued if it will be for the betterment of their country. This makes forex trading very complicated.