ManagementMania AppMania EduMania JobMania BusinessPages

What is Foreign Exchange Market (FOREX)
The Foreign Exchange market (FOREX or FX, for short) is the international currency exchange market.

The Foreign Exchange market (FOREX or FX, for short) is the international currency exchange market. On the FOREX, currencies with a flexible rate are traded; the trading takes place practically 24 hours a day, 5 days a week, i.e. continuously on a world-wide level. This is possible because in contrast to the stock markets, FOREX does not have a central physical presence and the trading occurs solely with the help of information technology and interconnected network systems.

FOREX in practice: At the foreign exchange market, trade in currencies with a flexible currency rate occurs in so-called currency pairs (e.g. the US dollar and the Euro form the currency pair USD / EUR) – this is where the rates of the currencies in relation to each other get set. The FOREX market is the biggest and the most liquid of all financial markets world-wide. The trading on the FOREX is free of charge, it doesn´t require any special permits or licences; all that it takes is an internet connection and software which enables its user to trade over the internet. Trading on the FOREX is open to practically all financial subjects – individual investors as well as institutions (banks, investment funds, brokers). FOREX traders aim to profit from the movement of currencies – they buy one currency and sell another one. Similarity to the stock market, no physical consummation of the trade takes place; the sold or bought currency does not physically change owners, but the trader only uses the movement of the rates for the realization of profits.

Related terms and methods:

Related management field:

previous next
Other information and sources (International)
Did this article help you?
Last update: 27.09.2016


You cannot contribute to the discussion because it is locked

Related consulting companiesmore...