What is Forex?
Currency is similar to language, in that it varies from country to country. If you want to do international business or
buy goods from abroad, you must pay with the local currency. For instance,
you wouldn’t expect to use Swiss Francs to pay for your meal in Marrakech, which is exactly where Forex trading comes in.
Global currencies are traded on the foreign exchange market. Comparing this market to the
stock market is one way to grasp the sheer scale of it; the average traded value of the global stock market is around
$2,000 billion per day, while Forex trading surpasses $4.9 trillion daily.
Unlike some other markets, this is no central market for Forex trading. Currency trading is all done over the counter electronically on global computer networks between individual traders. There are five major Forex trading centers: Frankfurt, Hong Kong, London, New York and Tokyo.
The Forex market is open 24 hours a day, five and a half days a week, and operates across nearly every time zone, which makes for an active market in a continual state of flux, with prices changing all the time.