Forex or FX is an abbreviation of “Foreign Exchange”. Foreign exchange trading has been among the most dynamic financial markets in recent decades. The daily trading volume can exceed 6 trillion dollars, making it one of the most liquid asset classes. By its very nature, the forex market is an exchange of one currency for another at a specific transaction rate.

Foreign exchange trading is part of our lifestyle. When we purchase foreign currency for a trip or shop online from foreign websites, we are practically making forex transactions. In fact, the forex market provides a meeting place for individuals and businesses with diverse interests and financial capabilities. These include banking and non-banking financial institutions motivated to enter the market for operational, regulatory or other reasons. Multinational corporations are another key player conducting foreign exchange transactions, most often as part of the trading process or to hedge currency risk. The group of traders in turn trades on the forex market for purely speculative purposes.  

Foreign exchange trading is carried out on an OTC (over the counter) or decentralized basis. In practice, the interests of all market participants are realized in a global electronic forex network. The banking sector provides liquidity for the foreign exchange operations of the various market participants (e.g., brokers).

Forex trading takes place around the clock during the working week. The largest trading volumes are realized when the London and New York sessions overlap. During these periods, the market is extremely liquid and, accordingly, offers the best trading costs.

The growing popularity of forex trading among individual traders is due to the ease of access, the opportunity to open a trading account with limited assets (often less than $50), the ability to increase the magnitude of trading operations through leverage.

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