How Does It Work?

At its core, forex trading is akin to the currency exchange you might engage in when traveling internationally: a trader buys one currency and sells another, with exchange rates fluctuating frequently due to supply and demand dynamics.

The foreign exchange market is a global marketplace operating 24 hours a day from Monday to Friday, where currencies are traded. Forex trading is conducted entirely over-the-counter (OTC), meaning there is no physical exchange of currencies, and the market is overseen by a global network of banks and other financial institutions.

The forex market is predominantly driven by institutional traders, such as those working for banks, hedge funds, and multinational corporations. These traders are often not interested in taking physical possession of the currencies but rather speculating on or hedging against future exchange rate movements.