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.

Build your trading knowledge

Discover how to trade with IG Academy, using our series of interactive courses, webinars and seminars.

A - B - C - D - E - F - G - H - I - L - M - N - O - P - Q - R - S - T - U - V - W - Y

See all glossary trading terms

Contact us

24 hours a day from 10am Saturday to Friday night at midnight.

010 344 0053

You can also email helpdesk.za@ig.com

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.