What is Forex?
Forex, which is the short-term for foreign exchange, is the act of buying and selling of one currency to another. As the term implies, Forex is traded in pairs – either with one currency to another or with one currency to a commodity.
Forex is the largest financial market in the world, with a volume of USD5.3 trillion traded daily. This is even larger than largest stock market in the world, New York Stock Exchange, which trades a volume of USD22.4 billion daily.
Unlike stock market or other financial markets, Forex is not traded in a physical exchange; instead it is traded worldwide via an electronic system.
When can you trade Forex?
Forex is traded 24 hours a day, 5 days a week.
Actual open hours and closing hours depend on local business hours of each countries. Also, opening time and closing time may differ by 1 hour for countries that implement Daylight Savings Time during the summer hours.
The following are based on GMT +8 time zone:
- Oceania/Asia opens at 5 am and closes at 7pm
- Europe/London opens at 3pm and closes at 12am
- US opens at 9pm and closes at 5pm
Who Participates in Forex?
- Government and central banks
- Commercial banks
- Businesses that deals with importation and exportation
- Hedge funds
- Retail traders (individual traders)
What Currency Pairs are Traded Most?
- Euro/ US Dollar (EUR/USD)
- US Dollar/ Japanese Yen (USD/JPY)
- Great Britain Pound/ US Dollar (GBP/USD)
- US Dollar/ Swiss Franc (USD/CHF)
- US Dollar/ Canadian Dollar (USD/CAD)
- Australian Dollar/ US Dollar (AUD/USD)
- New Zealand Dollar/ US Dollar (NZD/USD)