Forex trading is the exchange of one currency to another for trading purposes.
It is similar to the currency exchange one may do while traveling abroad.
A trader buys one currency and sells another, and the exchange rate constantly fluctuates based on supply and demand.
Currencies are traded in the foreign exchange market, a global marketplace that’s open 24 hours a day Monday to Friday.
Forex trading is conducted over the counter, meaning there’s no physical exchange (as there is for stocks) and a global network of banks and other financial institutions oversee the market.
Vast majority of trade activity in the forex market occurs between institutional traders, such as people who work for banks, fund managers and multinational corporations.