Foreign Exchange Market
The global decentralised market where currencies are traded.
The foreign exchange market is the global market where currencies are traded, the largest in the world.
The foreign exchange market is the global, decentralised market where currencies are bought and sold. It is the largest financial market in the world, trading trillions of dollars a day across banks, institutions and retail traders. It runs nearly around the clock through overlapping sessions.
How It Works
- It is decentralised, not on one exchange
- It runs around the clock across sessions
- Banks, institutions and retail all take part
Trading Tips
Know the session that suits your style
Watch liquidity between the London and New York overlap
Treat the market as global, not local
Foreign Exchange Market Example
Say Tokyo lunch passes the book to London open, which passes to New York afternoon, which passes back to Sydney: $9.6 trillion changing hands daily with no closing bell, no headquarters, no single price anywhere.
How Traders Use Foreign Exchange Market
Trade the session that fits the pair: Asia for yen, London for euro and sterling, New York for dollar decisions. Overnight gaps are features of a market that never sleeps, so size accordingly.
Related Terms
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