What is Forex?

Stacks of coins with the word FOREX isolated on white background

What is Forex?

The forex market is the international currency market. Forex is an acronym for Foreign Exchange market. It is the largest financial market in the world, with a turnover of more than 4 trillion dollars daily. To understand what this volume means, it is what the New York Stock Exchange (the largest in the world) can move in a whole month.


What is Forex Trading?

With money. How? Yes, Forex trading consists of buying and selling currencies, currencies, that is, money. Currencies are traded through a broker or dealer and are traded in pairs, for example euro and US dollar: (EUR / USD pair).

You really do not buy or sell anything physically so you may confuse it a bit. Think of the purchase of foreign currency as the purchase of a share in the economy of a country, since the price of its currency is a direct reflection of what the market thinks about the present and future state of the country’s economy. In Forex, as mentioned, it is traded in currency pairs, as stated in this paragraph the price of trading a particular currency pair reflects the economic conditions of a particular country versus the country of the other currency that makes up the pair .

Unlike other financial markets, the Forex market is decentralized and has no physical location. The Forex market is considered an over-the-counter or over-the-counter market, due to the fact that this market operates electronically, in a network among banks 24 hours a day.