The foreign exchange market — forex — is where currencies are traded. With a daily volume exceeding $7.5 trillion, it dwarfs every stock exchange on the planet combined. Unlike the NYSE or London Stock Exchange, forex has no central building. It operates as a decentralised, over-the-counter (OTC) network connecting banks, institutions, and retail traders worldwide.
Forex is open 24 hours a day, 5 days a week. Trading begins when Sydney opens on Monday morning and doesn't stop until New York closes on Friday evening. This continuous cycle exists because the market follows the sun across four major sessions.
Sydney (10 PM – 7 AM GMT): The quietest session, with AUD and NZD pairs most active. It's the market's opening bell each week.
Tokyo (12 AM – 9 AM GMT): JPY pairs dominate. Liquidity picks up as Asian institutions enter the market.
London (8 AM – 5 PM GMT): The biggest session by volume. EUR, GBP, and CHF pairs see the tightest spreads and strongest moves.
New York (1 PM – 10 PM GMT): USD-heavy trading. The London–New York overlap (1 PM – 5 PM GMT) is the most volatile window of the day.
Central banks and commercial banks account for the largest share of daily volume. They trade to manage reserves, facilitate international commerce, and implement monetary policy. Hedge funds and institutional investors speculate on currency movements for profit.
Retail traders — individuals like you — make up a small but growing slice. Thanks to online brokers, leverage, and $10 minimum deposits, anyone with an internet connection can participate. Corporations also trade forex to hedge against currency risk when doing business across borders.
Forex is always traded in pairs. When you buy EUR/USD, you're buying euros and selling US dollars simultaneously. The first currency is the base; the second is the quote. If EUR/USD = 1.0850, one euro costs 1.0850 US dollars.
This dual nature means there's always opportunity — when one currency weakens, the other strengthens. You can profit whether markets rise or fall, as long as you correctly predict the direction.