Forex, or foreign exchange, is the market where currencies are bought and sold. In simple terms, it’s like exchanging money when you travel to another country.
For example, if you’re traveling to Japan, you might exchange your dollars for Japanese yen at the airport. If you think the yen will be worth more later, you can exchange it back and make a profit. That’s forex trading!
How Forex Works
Forex trading happens when you exchange one currency for another. The rates between currencies change constantly, so traders try to buy currencies at a low price and sell them at a higher price to make a profit.
The Forex Market
The forex market is the biggest financial market in the world, with $7.5 trillion traded every day. It’s open 24 hours a day, 5 days a week, and involves banks, companies, governments, and individual traders.
Most of the forex market is for speculation—traders trying to profit from changing currency prices.
How Forex Compares to Other Markets
The forex market is much bigger than the stock market:
- Forex market: $7.5 trillion a day
- Stock market (NYSE): $20 billion a day
The forex market is over 200 times bigger than the New York Stock Exchange!
Why Forex is So Popular
Forex is popular because it’s open 24/5 and is easy to start. You don’t need a lot of money to get started, and it’s accessible to people anywhere in the world.
Forex Hours
The forex market never fully closes. Trading starts in New Zealand, then moves to countries like Australia, Japan, and the UK, and ends in the US. This happens 24 hours a day during the week
