Forex trading is the exchange of one currency for another on the world's largest financial market. Learn how the market works and why currencies trade in pairs.
Forex, short for "foreign exchange", is the global marketplace where currencies are bought and sold. It is the largest and most liquid financial market in the world, with trading taking place 24 hours a day, five days a week across banks and institutions worldwide.
Because you are always exchanging one currency for another, forex is quoted in pairs such as EUR/USD or GBP/USD. The first currency is the "base" and the second is the "quote" currency. If EUR/USD is 1.10, it means one euro is worth 1.10 US dollars. When the price rises, the base currency has strengthened; when it falls, it has weakened.
The forex market has no single central exchange. Instead, it operates over-the-counter (OTC) through a global network of participants. This decentralised structure is what gives the market its deep liquidity and near-continuous availability.
Most retail traders access forex through instruments such as CFDs (contracts for difference), which allow you to speculate on price movements without owning the underlying currency. Many of these products use leverage, which magnifies both potential gains and potential losses. You can learn more terms in our glossary.
If you are just getting started, it helps to understand core concepts first — such as what a pip is and how leverage works — before placing your first trade.
Risk warning: Forex and CFD trading carries a significant risk of loss and may not be suitable for all investors. Before trading, make sure you understand how these products work and that you can afford to take the high risk of losing your money.
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