Introduction to Forex – What is Forex

Posted by Michael Glass on May 16, 2012 at 2:53 pm

Introduction to Forex

What is Forex

The Foreign Exchange Market (forex) facilitates the process of exchanging one currency for another. It is the place where currencies are traded and converted for one and another. The forex market, which is all electronic, was created around the mid-1970s. The exchange rate is established by the consensus of buyers and sellers. It is the relative value of the base currency vs the value of the quote currency. Forex is traded in currency pairs: Base Currency vs. Counter Currency (Quote)

The Forex market is the largest and most liquid financial market in the world. The daily volume of transactions in the forex market ranges between 1-3 trillion dollars. One of the reasons the Forex Market is so liquid is that it is open 24 hours a day, five and a half days a week. Although Forex is traded worldwide, the largest financial centers are London, New York and Hong Kong. The US Dollar is involved in approximately 90% of all forex transactions.