Forex, short for "foreign exchange," refers to the global marketplace where currencies are traded. It's one of the largest and most liquid markets in the world, with an average daily trading volume exceeding $6 trillion. Unlike stock markets, which have a centralized exchange, the forex market operates over-the-counter (OTC), meaning transactions occur directly between participants without a central exchange or clearinghouse.

Overview of the Forex Market

The forex market operates 24 hours a day, five days a week, and is divided into four major trading sessions: Sydney, Tokyo, London, and New York. This around-the-clock nature allows traders to respond to economic, political, and social events in real-time, making it a dynamic and highly responsive market. Currencies are traded in pairs, such as EUR/USD or GBP/JPY, where one currency is exchanged for another.

Key Participants in the Forex Market

The forex market comprises various participants, each with distinct roles and objectives which explore in this books.