24/02/2023
What is Forex?❓
Forex is simply Foreign Exchange. 💱
For-ex is short for (foreign exchange) the transaction of changing one currency into another currency.
This process can be performed for a different reasons including commercial, tourism and to enable international trade.
International currencies need to be exchanged to conduct foreign trade and business.
A French tourist in Egypt can’t pay in euros to see the pyramids because it’s not the locally accepted currency.
The tourist has to exchange the euros for the local currency, in this case the Egyptian pound, at the current exchange rate.
One unique aspect of this international market is that there is no central marketplace for foreign exchange.
Rather, currency trading is conducted electronically over the counter (OTC), which means that all transactions occur via computer networks among traders around the world, rather than on one centralized exchange.
The market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in the major financial centers of Frankfurt, Hong Kong, London, New York, Paris, Singapore, Sydney, Tokyo, and Zurich—across almost every time zone.
This means that when the U.S. trading day ends, the forex market begins anew in Tokyo and Hong Kong. As such, the forex market can be extremely active anytime, with price quotes changing constantly.
Tips 💎
Note that you’ll often see the terms FX, forex, foreign exchange market, and currency market. These terms are synonymous and all refer to the forex market.
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