Foreign Exchange, commonly known as FOREX, refers to the global marketplace where currencies are bought, sold, and exchanged. Unlike traditional markets that focus on equities or commodities, FOREX trading is centered on the relative value of one nation’s currency compared to another. These currency relationships—known as currency pairs—form the foundation of all activity within the FOREX market. Currency values are influenced by a wide range of economic and political factors, many of which are shaped or managed by national governments and central banks. As a result, the FOREX market plays a critical role in global finance and international trade. Major participants include central and commercial banks, multinational corporations, governments, hedge funds, and other large financial institutions that transact in substantial volumes on a daily basis. How FOREX Differs from the Stock Market One of the defining characteristics of the FOREX market is its international nature. Every FOREX tr...
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