Module 1 — What Is Forex?

Forex — foreign exchange — is the global market where one currency is exchanged for another. Every time a company pays an overseas supplier, a tourist changes money at an airport, or a central bank manages its reserves, a currency exchange takes place. Put all of that activity together and you have the largest, most liquid financial market in the world.

Unlike a stock exchange, Forex has no single building and no central marketplace. It is an over-the-counter market: a network of banks, brokers, funds and traders quoting prices to each other electronically. Because that network spans every major financial centre, the market runs continuously from the Sydney open on Monday morning to the New York close on Friday evening.

What you are actually trading

You never buy a currency in isolation. You always express an opinion about one currency relative to another. Buying EURUSD means you expect the euro to strengthen against the US dollar. If the euro weakens instead, the position loses. That relative nature is the single most important idea in this course.