There is no single Forex exchange
Stocks may trade mainly through a particular exchange. Forex works differently. Banks, financial institutions, companies, funds, brokers and other participants connect through a global network.
This is why the Forex market is often described as decentralised.
Why can Forex trade almost 24 hours a day?
Major financial centres open at different times. As one part of the world becomes quieter, another becomes active.
This cycle keeps currency trading active from Monday to Friday. Weekends are generally closed for normal retail Forex trading.
Who moves the market?
Different participants have different reasons for buying and selling currencies:
- Banks and institutions process large currency transactions.
- Companies exchange currencies for international business.
- Central banks influence currencies through monetary policy.
- Funds and investors manage investments and currency exposure.
- Traders try to benefit from price movement.
Why trading conditions change
The number of active participants is not the same throughout the day. When London and New York are both active, for example, major currency pairs often have more activity and liquidity. During quieter periods, spreads can be wider and price can behave differently.
- Forex is a global network.
- Different sessions create different levels of activity.
- Liquidity and spreads can change through the day.