Foreign exchange trading—also known as Forex or FX trading—is the buying and selling of currencies on the global foreign exchange market. It is by far the largest and most liquid financial market in the world, with a daily trading volume of several trillion US dollars.
Trading always takes place in currency pairs, such as EUR/USD or GBP/JPY, where the price represents the exchange rate between two currencies. The forex market is decentralized and operates 24 hours a day, five days a week.
Market participants include central banks, commercial banks, institutional investors, corporations, and retail traders. Through the use of leveraged products, relatively small amounts of capital can control significantly larger positions.
Forex trading is particularly well-suited for systematic and algorithmic trading approaches.
