Forex trading definition

Forex trading is the act of speculating on the foreign exchange market, with the aim of making a profit. It can also be known as FX trading, foreign exchange trading or currency trading.

Trading forex involves buying one currency while simultaneously selling another. This is why forex quotes are always given in the form of currency pairs made up of the quote currency (the currency being sold) and the base currency (the currency being bought).

The price movements in currencies are governed by a wide variety of factors but tend to reflect the state of their countries’ economy.

The forex market is over-the-counter (OTC), which means that forex trading takes place 24 hours a day. There is no central location for the forex market; instead it takes place via a global network of banks.

Learn more about forex

Find out more about forex trading, including what the spread is and how leverage in forex works.

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