What is Forex?
An Introduction to Forex
Forex, also known as the foreign exchange or the currency market, is the largest global market. Forex traders exchange one currency for another in the attempt to profit from price changes over time. Currencies are always traded in pairs, such as the US dollar against the GB pound.
Forex Participants
The forex market is the largest in the world in terms of the volumes traded. There is a wide variety of forex traders. Typical participants include large multinational companies, private banks, insurance companies, central banks, national governments, specialised forex trading companies and private individuals. The large number of participants makes forex one of the most vibrant and potentially unpredictable markets you could enter.
Global and 24 Hours
Forex is an over-the-counter (OTC) market. Unlike stock exchanges, forex does not have a single designated exchange for a currency pair. Forex is open 24 hours a day and trading occurs between participants around the world; once Asian trading ceases, forex moves West with the sun to Europe, then to the US, and so on back to Asia. Currency pairs can be traded from anywhere in the world at any time.
Forex Price Changes
Currency pairs can rise or fall in value depending on national and global economic news, political instability, significant corporate news – such as management changes – new product launches or monetary flows. The majority of these types of news are publicly available, meaning anyone can venture to predict the rise and fall of currency pair prices.