What is currency trading?

Currency trading is the buying and selling of different world currencies, according to Forex Tips. Currency trades are conducted by buying or selling one currency relative to another on the expectation that the relative value of the currencies will move in one direction or another.

If a particular trader believes the value of the U.S. dollar will fall in the future relative to the British pound, that trade sells the U.S. dollar and British pound currency pair, according to Forex Tips. Traders can profit when currency values rise and fall, as long as they pick the right direction in a trade. Currency trading is often very volatile, reports Forex Tips.