Foreign Exchange Market
The $7.5 trillion daily market where currencies are traded 24/5
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The foreign exchange (forex/FX) market is where currencies are bought and sold. With $7.5 trillion in daily trading volume, it dwarfs all other markets—stocks, bonds, commodities combined. Open 24 hours, 5 days a week, it's the ultimate global marketplace.
Unlike stock exchanges, forex is decentralized—trading happens directly between parties (OTC) through a network of banks, brokers, and electronic platforms. When you travel abroad and exchange dollars for euros, you're participating in this massive market.
Market Size Comparison
Who Participates?
Fed, ECB, BoJ intervene to stabilize currencies. Can move markets with single announcements. Control interest rates affecting FX values.
Facilitate client trades, provide liquidity. Account for 40%+ of volume. Profit from bid-ask spreads.
Apple, Toyota hedge currency risk. International trade requires constant FX conversion. Protect profit margins from volatility.
Speculate on currency moves. Use high leverage (50:1-500:1). Seek profit from interest rate differentials and trends.
Forex opens Sunday 5pm EST (Sydney) and closes Friday 5pm EST (New York). As one region closes, another opens—London, New York, Tokyo, Sydney rotate. This creates continuous price discovery across time zones.