Foreign exchange “Forex” is an off-exchange retail foreign currency market where the purchase of a particular currency from an individual or institution and the simultaneous sale of another currency at the equivalent value or current exchange rate occurs. Essentially, the process of exchanging one currency for another is a simple trade based on the current rates of the two currencies involved.

It is important to note that retail Forex traders will most likely be accessing the off-exchange foreign currency market (or Forex market) via an FCM (Futures Commissions Merchant) or Forex broker. Trades will not be conducted in the actual Interbank market itself.

Unlike other financial markets, the Forex market operates 24 hours a day, 5.5 days a week (6:00 PM EST on Sunday until 4:00 PM EST on Friday). Through an electronic network of banks, corporations and individual traders exchange currencies. Though, as Forex is primarily used as a means for speculative investing, actual physical delivery of currencies is almost never intended. Forex trading begins every day in Sydney, moves to Tokyo, followed by Europe, and finally the Americas through the course of the day (due to the time zone differences).