Lesson 1 of 11 · 7 min
What is forex?
What the foreign exchange market is, who trades in it, and why it never seems to sleep.
By the end you'll be able to
- Explain what the forex market is and who uses it
- Describe how your order reaches the market
- Say when the market is open and when it is busiest
Free course
Enrol in “Forex Foundations” to start this lesson
Enrolling is free. Your progress, quiz scores and certificate are kept in your account, on every device.
- 11 short lessons with quizzes and interactive tools
- Lesson videos for members
- A certificate when you finish
Every time you change money for a holiday, you take part in the largest market in the world. Forex traders do the same thing, for a different reason.
A market for swapping currencies
Forex (short for foreign exchange, often just FX) is where one currency is exchanged for another. There is no single building or exchange. It is a network of banks, brokers and traders connected electronically, trading around $7 trillion a day.
Most of that volume comes from:
- Companies paying overseas suppliers in another currency.
- Central banks managing their reserves and their currency.
- Banks and funds moving money for clients and for profit.
- Travellers and migrants exchanging money and sending it home.
- Retail traders like you, trying to profit from price changes.
How your order reaches the market
Your order never goes "to the market" directly. It always passes through a broker.
You don’t trade with the market directly. You open an account with a broker, place orders on its platform, and the broker passes them on to large banks (its liquidity providers) or fills them itself. The next lessons cover what that costs you and how to choose a broker.
The market follows the sun
Open now: …
The outer ring shows the London–New York overlap, usually the busiest hours of the day. Times shown in your time zone.
Forex is open 24 hours a day, five days a week. Trading moves from Sydney to Tokyo to London to New York as each centre starts its day. The busiest, most liquid hours are usually when London and New York overlap. Weekends are closed.
Use the clock to see which sessions are open right now, in your local time, and when the next London and New York overlap starts.
Quick check
Question 1 of 3
Where does forex trading physically take place?
Question 2 of 3
When is the forex market busiest?
Question 3 of 3
How does your order get to the market?
Go deeper: The four forex sessions and when the market really moves · Forex trading for beginners: a 30-day learning plan · Forex vs Stocks: Key Differences for New Traders · What Is Forex Trading? A Complete Beginner’s Guide