These rates are usually pegged to the U.S. dollar. Their central banks have enough money in their foreign currency reserves to control how much their currency is worth. To keep the exchange rate fixed, the central bank holds U.S. dollars. It also increases the supply of dollars, sending its value down.

Forex trading may make you rich if you are a hedge fund with deep pockets or an unusually skilled currency trader. While this could be interpreted to mean that about one in three traders does not lose money trading currencies, that's not the same as getting rich trading forex.

Assume you open an account for $100 (the minimum initial deposit most forex brokers accept). Your risk on each trade is therefore limited to $1 per trade (1% of$100). If you place a trade in the EUR/USD, buying or selling one micro lot, your stop loss order must be within 10 pips of your entry price.