What Is Forex? A Simple Guide to Foreign Exchange Markets
You’ve exchanged money for a trip abroad, congratulations, you’ve already used the forex market. But there’s far more to it. Forex Defined Forex (short for foreign exchange) is the global marketplace where currencies are traded. It’s the largest financial market in the world, with over $7.5 trillion changing hands every single day. Who Trades Forex? Central banks – to manage their currency’s value Commercial banks – facilitate client transactions and trade for profit Multinational companies – pay suppliers or receive payments in foreign currency Investment funds – speculate or hedge Retail traders – individuals like you and me, trading via online brokers Key Features Feature Forex Hours 24 hours a day, 5 days a week (Sunday evening to Friday night) Liquidity Extremely high – you can buy/sell almost any amount instantly Location No central exchange; it’s an over‑the‑counter (OTC) network Leverage Often high (e.g., 50:1 or more), meaning big gains or losses Major Trading Sessions Forex follows the sun: when one major financial centre closes, another opens. ...