Forex Trading
Forex Trading
Forex Trading
The forex market is the market in which participants can buy, sell, exchange, and
speculate on currencies. The forex market is made up of banks, commercial
companies, central banks, investment management firms, hedge funds, and retail
forex brokers and investors. The currency market is considered to be the largest
financial market with over $5 trillion in daily transactions, which is more than
the futures and equity markets combined.
The forex market is made up of two levels; the interbank market and the over-the-
counter (OTC) market. The interbank market is where large banks trade currencies
for purposes such as hedging, balance sheet adjustments, and on behalf of clients.
The OTC market is where individuals trade through online platforms and brokers.
Operating hours
From Monday morning in Asia to Friday afternoon in New York, the forex market is a
24-hour market, meaning it does not close overnight. This differs from markets such
as equities, bonds, and commodities, which all close for a period of time,
generally in the New York late afternoon. However, as with most things there are
exceptions. Some emerging market currencies closing for a period of time during the
trading day.
According to the 2018 Greenwich Associates study, Citigroup and JPMorgan Chase &
Co. were the two biggest banks in the forex market, combining for more than 30
percent of the global market share. UBS, Deutsche Bank, and Goldman Sachs made up
the remaining places in the top five. According to CLS, a settlement and processing
group, the average daily trading volume in January 2018 was $1.805 trillion.