## Get to Know FX: The 24/7 Financial Market

**What is FX?** Many people might be confused by the terms Forex or FX, thinking they are just complex financial jargon. In fact, Forex (Foreign Exchange) is the exchange of foreign currencies — the largest financial market in the world where individuals and financial institutions all exchange one currency for another.

If you've ever traveled abroad and exchanged money, you've already participated in the FX market. For example, a traveler from Taiwan exchanges NT$10,000 (NTD) for US dollars (USD) at an exchange rate of 0.034. By doing this, the traveler considers the foreign exchange in its basic form.

## The Difference Between Real-Life Forex and Short-Term Trading

However, real-life FX transactions are actually a small part of the market. Most of the FX market consists of profit-seekers or "speculators" who buy one currency to sell later at a higher price. For retail investors like us, we can access the FX market through Forex brokers who act as intermediaries.

## How Big Is the FX Market?

**The Forex market is the most traded financial market**. The daily trading volume of the global FX market is $6.6 trillion (according to BIS report in 2019) — nearly 30 times the NYSE stock market, which has only $22.4 billion per day.

For the Spot market (the market most retail traders participate in), the trading volume is $2 trillion per day, which remains about 10-15 times larger than NYSE. It is estimated that retail investor trading (our segment) accounts for about 3-5% of daily trading volume, or approximately $200-300 billion.

## The FX Market Operates 24/5

**The FX market is open 24 hours a day, 5 days a week**, unlike stock markets or other markets that close on weekends and reopen the next day. The FX market does not close; instead, trading shifts according to the banking hours of different regions worldwide.

The trading cycle begins in New Zealand (NZD), then moves to Australia (AUD), during the Asian lull: Japan (JPY), Singapore, and Hong Kong. Next is Europe (GBP), London, then North America (USD), New York, and finally back to New Zealand, restarting the cycle.

## Characteristics of the Forex Market

The FX market has features that distinguish it from other markets:

**1. Decentralized Structure (Decentralized)**
The Forex market is an Over-the-Counter (OTC) system. There is no single central location. It’s called a "market," but in reality, it’s a network of electronic communications.

**2. Highest Liquidity**
"Liquidity" refers to trading volume and ease of entering and exiting positions. Most currency exchanges are driven by speculation — profit-seekers — who require continuous price movements. This high demand creates enormous trading volume and provides traders with flexible entry and exit options.

**3. Open 24 Hours**
The FX market offers investors worldwide the opportunity to profit from exchange rate fluctuations 24 hours a day, 5 days a week. Over 180 currencies are traded on the Forex platform, each with local opening and closing times according to their time zones.

The **FX market is** a space with high energy, liquidity, and demand. It is the hub for international currency transactions and provides retail traders the chance to participate in the largest financial market in the world.