minus academy faq plus academy faq Check in circle Apple Android Home Magnifer Calculator Mail Email Facebook Twitter RSS Linkedin Linkedin hollower Headphones Wechats Instagram Line Mail 2 Phone Phone 2 Minus Plus Arrow right Arrow left (variant 2) Arrow right (variant 2) Brand logo Brand logo not filled Hamburger Flag of the Hong Kong Flag of the US/GB Flag of the US/GB Flag of the US/GB Flag of the China Flag of the China Flag of the China (traditional) Flag of the Taiwan Flag of the Hong Kong Flag of the Spain Flag of the Russia Flag of the France Flag of the German Flag of the Portugal Flag of the Italy Flag of the Poland Flag of the Czech Flag of the Hungary Flag of the Sweden Flag of the Bulgarian Flag of the Finland Flag of the Lithuania Flag of the Denmark Flag of the Croatia Flag of the Estonia Flag of the Norway Flag of the Romania Flag of the United Arab Emirates Flag of the United Arab Emirates Flag of the Indonesia Flag of the Malaysia Flag of the Korea Flag of the Korea Flag of the Samoa Flag of the Vietnam Flag of the Thailand Flag of the Turkey Flag of the Japan Cross Cross large User Arrow down Arrow up Cube Info list Data comunication Clock Slash
A to Z Academy
A to Z Academy / 2. What is Foreign Exchange

8. Understand the Foreign Exchange (FX / Forex) Market

November 13, 2020 16:44 PM

With economic globalization, the interaction of economic activities among countries, including trade, tourism, consumption, and investment in various assets, is becoming more and more frequent.

In the process, currency transactions naturally occur.

Forex / FX is the financial market which deals with currency transactions all over the world in a decentralized form. 

Global Forex Participants

The forex market does not have a physical entity, and most of the transactions happen in OTC markets. With the popularity of communication networks, trading is no longer limited by time or distance. The development of technology has also made forex trading electronic, providing great flexibility and low transaction costs so that there is almost no threshold to participate in forex trading. 

Participants in the forex market include;

  • the central bank
  • the government
  • investment banks
  • commercial banks funds
  • financial institutions
  • major enterprises
  • importers and exporters
  • speculators
  • ordinary investors

As a result, the exchange market is a market with the largest trading volume and the strongest liquidity in the world.

Related Article: What is market liquidity?

Every three years, the Bank for International Settlements (BIS), reports the average daily volume of transactions.  The global forex market was $6.6 trillion in April 2019, up nearly 30 percent from $5.1 trillion in 2016.

The purpose of participating in the forex market is the promotion of international trade and investment,  speculation and carry trades. 

Is the Forex market open 24 hours a day? 

With the development of information and technology, time and distance restrictions have disappeared. Major financial centres globally are connected and linked more than ever before. Including Sydney to Tokyo, Hong Kong and Singapore, and then from Frankfurt to London and New York.

When the Asian trading session ends, the European trading session begins, followed by the North American trading session, and back to Asia. Therefore, the forex market dominated by OTC trading has become a place that can trade 24 hours a day, five days a week.

Only in the event of weekends and major festivals in various countries, the forex trading hours will be adjusted. 

In addition, 24-hour trading in forex has become more popular due to the rise of retail forex brokers and online forex trading platforms since 2000. Forex brokers have lowered the entry barrier, allowing smaller traders around the world to connect with the global forex market through their platforms. In addition to making the forex market more active and giving it ample liquidity, it also makes the entire currency market ecosystem more complete. 

Next Article: 9. What is market liquidity in forex?


About ZFX (Zeal Capital Market) 
  • The Best Trading Platform Award 2019 from Financial Weekly, Regulated by FCA & FSA.
  • 100+ trading assets, including Forex, Stocks, Indices, Gold, Crude Oil, etc.
  • 3 types of trading accounts to meet the needs of every customer
  • 0 commission, low spread, leverage ratio up to 1:2000
  • Powerful trading platform that executes 50,000 orders/s
  • Open an account with a minimum deposit of $50
  • 24-hour Customer Service

Understand Foreign Exchange (FX / Forex) Market | Z Academy


Risk Warning: The above content is for reference only and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations conducted by this article. Please be firm in your thinking and do the corresponding risk control.

Knowledge is POWER
Never miss an opportunity to learn and grow as a trader. Join the ZFX Academy mailing list to be the first to know about our next webinar, article or guide.
Contact Us