The foreign exchange market, or forex (FX), is the world’s largest financial market. It facilitates the exchange of currencies and operates 24 hours a day, five days a week.
Forex stands for "foreign exchange" and refers to the process of converting one currency into another. This can be for commerce, trading, tourism, or investment.
Modern forex trading began after the collapse of the Bretton Woods system in the early 1970s, when currencies shifted from being fixed to floating. This change allowed currencies to be traded freely on global markets.
Forex trading involves buying one currency while simultaneously selling another. It typically occurs in pairs (e.g., EUR/USD) and is conducted through brokers or electronic trading platforms.
Prices are influenced by interest rates, economic data, geopolitical events, and market sentiment.
Forex markets can be highly volatile due to leverage and macroeconomic uncertainty. Traders must manage risk carefully using tools like stop-loss orders and position sizing.
Yes. With the rise of online platforms, retail investors can trade forex using margin accounts. However, it requires discipline, education, and strong risk management.
Yes, in most countries, forex trading is legal and regulated.
Some brokers allow trading with as little as $10, but larger amounts are recommended for better risk control.
Some do, but many lose money due to high leverage and lack of preparation. Education and discipline are key.
Forex is an essential part of the global economy. It offers opportunities and risks alike. Whether you're a casual investor or aspiring trader, understanding how the forex market works is a valuable skill in today’s financial world.
Published: June 2025