WHAT IS FOREIGN EXCHANGE MARKET?

OVER THE COUNTER (OTC)

Over-the-counter or off-exchange trading is done directly between two parties, without the supervision of an exchange. It is contrasted with exchange trading, which occurs via exchanges.

Forex or foreign exchange (FX) is a decentralized global market where all the world's currencies trade. The Forex market is where banks, businesses, governments, investors, and traders come to exchange and speculate on currencies.


The FX market is the most liquid and largest in the world with an average daily trading volume of approximately more than $5 trillion, which is far greater than all the stock markets combined.


Currency Pairs.png
Currency Pairs.png

Other important attributes of FX market are its hours of operations, traders can trade currencies in FX market 24 hours a day, 5 days a week.


Unlike the stock or bond markets, the forex market does not close at the end of each business day. Instead, trading just shifts to different financial centers around the world. It should be noted that there is no central marketplace for the Forex market; trading is instead said to be conducted ‘over the counter’; it’s not like stocks where there is a central marketplace.

In the Forex market, the week begins at 6 p.m. EST on Sunday and runs until 5 p.m. on Friday.