What is Forex?
Forex (foreign exchange) is the global market for trading one currency against another. With trillions of dollars in daily volume, it is the deepest market on the planet — driven by trade, capital flows, central banks and speculation.
Forex market
The Foreign Exchange Market
The largest and most liquid market in the world — trading currency pairs 24 hours a day, 5 days a week.
Major, Minor and Exotic Pairs
Currencies trade in pairs. Majors involve the US dollar and the most-traded currencies. Minors are pairs that don't include the US dollar. Exotics combine a major currency with an emerging-market one.
- Majors: EUR/USD, GBP/USD, USD/JPY, USD/CHF
- Minors: EUR/GBP, EUR/JPY, GBP/JPY
- Commodity pairs: AUD/USD, NZD/USD, USD/CAD
- Exotics: USD/TRY, EUR/ZAR, USD/MXN
Market Participants
Central banks, commercial banks, hedge funds, corporations, brokers and individual traders all interact in the forex market — each with different motives and timeframes.
Trading Sessions
Forex follows the sun across four major sessions: Sydney, Tokyo, London and New York. Liquidity and volatility peak when sessions overlap, especially London/New York.
Opportunities
- •High liquidity and tight spreads on major pairs
- •24-hour access across global sessions
- •Both rising and falling currencies can be traded
- •Wide range of educational resources
Risks to know
- •Leverage can amplify losses just as quickly as gains
- •Macro news and central-bank decisions cause sudden volatility
- •Currency markets reflect complex global dynamics
- •Overtrading and emotional decisions are common pitfalls
Want to go deeper?
Browse structured lessons and videos in our Learning Center.