What is forex trading?

Forex trading, also known as foreign exchange or FX trading, is the conversion of one currency into another. FX is one of the most actively traded markets in the world, with individuals, companies and banks carrying out around $6.6 trillion worth of forex transactions every single day.

What is a speculative FX trader?

Speculative FX traders seek to profit from fluctuations in the exchange rates between currencies, speculating on whether one will go up or down in value compared to another. Forex is traded in pairs, meaning that when you trade forex, you are exchanging one currency for another.

How are forex prices determined?

Instead of trading via a central exchange such as the New York Stock Exchange or London Stock Exchange, forex prices are determined by interbank trading – the buying and selling of currencies between banks constantly, all over the world. The currency market is open 24 hours a day during market hours.

What makes the forex market unique?

The forex market is unique for several reasons, the main one being its size. Trading volume is generally very large. As an example, trading in foreign exchange markets averaged $6.6 trillion per day in 2019, according to the Bank for International Settlements (BIS). This exceeds global equities (stocks) trading volumes by roughly 25 times.