The Forex market operates as a decentralized global network where currencies are traded against each other. Unlike traditional exchanges, Forex has no single physical location, allowing participants from around the world to trade continuously across different time zones. This structure contributes to its high liquidity and constant price movement.
At the core of Forex trading is the concept of currency pairs, where the value of one currency is measured relative to another. Traders analyze economic data, central bank policies, political developments, and market sentiment to anticipate price movements. Even minor news events can have a significant impact on currency prices.
Because leverage is widely used in Forex trading, understanding market mechanics is essential. While leverage can amplify profits, it also magnifies losses. Educating traders about risk, execution, and market behavior is crucial for both traders and brokers seeking sustainable participation in the Forex market.