What is foreign exchange trading (Forex)?

Foreign exchange trading (forex trading) is an international market for buying and selling currencies. At $6.6 trillion, it is 25 times larger than all the world's stock markets. 1 2

What is a world forex market?

An interesting aspect of world forex markets is that no physical buildings function as trading venues. Instead, it is a series of connected trading terminals and computer networks. Market participants are institutions, investment banks, commercial banks, and retail investors from around the world. Who Trades on It?

What is currency exchange?

Currency exchange of this kind is one of the demand factors for a particular currency. Foreign exchange, also known as forex, is the conversion of one country's currency into another. The value of any particular currency is determined by market forces related to trade, investment, tourism, and geopolitical risk.

How do you participate in the forex market?

Forwards and futures are another way to participate in the forex market. The Forex market determines the day-to-day value, or the exchange rate, of most of the world's currencies. If a traveler exchanges dollars for euros at an exchange kiosk or a bank, the number of euros will be based on the current forex rate.