Exchange of foreign currencies is, for example, turn your dollar into euros when you go to European Union countries, or vice versa when they come here for vacation. Foreign exchange trading does something like this to make a living.
Through an online broker, you will open an account by entering some money into it. Foreign money exchange does not require you to place all of your purchases in advance. This means you buy by a margin, or use your money.
This is good when your trade is successful, a large decrease in trading against you will make brokers ask for more money to be placed in your account quickly, or all your assets will be sold and lost to you.
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When trading foreign currencies on an exchange, you must always be aware of the value of the dollar or whatever currency you buy or sell, which is why many computer monitors and terminals are present in the merchant's place of business.
The value of foreign currencies related to each other changes rapidly 24 hours a day since they were traded throughout the world. A little one-cent increase in dollars against the Japanese yen, for example, will make you a lot of money if you exchange yen for dollars.
Foreign exchange functions because different individuals or companies trade one currency with another currency and generate and lose money on currency changes in relation to each other.