FX Growth What is forex?
How the world's largest financial market works, who trades it and why prices move.
The foreign exchange market
Forex (FX) is the global market where currencies are exchanged. More than $7 trillion changes hands every day, making it the largest and most liquid market in the world.
There is no central exchange. Banks, brokers, companies and individual traders deal with each other electronically, 24 hours a day from Monday to Friday.
Currency pairs
Currencies are always traded in pairs, such as EUR/USD. The first currency is the base, the second is the quote. A price of 1.0850 means 1 euro costs 1.0850 US dollars.
Buying EUR/USD means you expect the euro to strengthen against the dollar; selling means you expect it to weaken.
Trading sessions
The day is split into the Sydney, Tokyo, London and New York sessions. The London–New York overlap is usually the busiest and most volatile period.
The market closes on Friday evening (New York close) and reopens Sunday evening.
Key takeaways
- Forex is a decentralised, 24/5 market.
- Every trade is one currency against another.
- Activity peaks when London and New York overlap.