What is Forex Market

by Jul 23, 2020What is Forex

Ultimate Tutorial for Traders

This tutorial have all what is needed about trading. It includes step by step guide:

How to start trading

What are trading basics every trader must know

Risk Management

Foundation strategy with supply and demand


Forex market as any other market includes selling and buying something. While Forex is a short word of Foreign Exchange, Forex means that something is exchanged.

What is exchanged and in which way? How could that be interesting to you? I will explain further in this post.

Like any other other market, the Forex market has working hours. There are times when the market is open and when it is closed.

While the Forex market is open to the whole world there are different times in each country when the market is open and when it is closed.

This article will cover all that you need to know about the Forex market.

If you want to know more about Forex you should read a  what is Forex trading guide generally.

What is Forex Market

Forex market is the market where currency exchange is done. Forex market meaning is a place where you can sell or buy currency that is offered by the broker you are trading with.

While you know what is currency exchange in your town this is little different. If you think it is an exchange office where you have a list of currency exchange rates listed on the screen, you are wrong.

There is no person behind the desk sitting and waiting for you to ask for an exchange.

Forex market is a decentralized market which means it is not located in one place, in one country. It means that it is scattered all over the internet servers where all people from the world can access it if they have Internet access.

If you have internet access and I think you have because you are reading this on the Internet, then you have access to the Forex.

What is Exchanged on the Forex Market

On the Forex market currencies are exchanged. Forex currency exchange is the market where mostly large banks and corporations exchange currencies to make payment of the services and goods easier to pay.

They have a large amount of currencies that must be converted to another currency so they seek the best way to exchange them. The best way is directly on the Forex market which is also known as the Interbank market.

Interbank market is a market behind the scenes where large banks exchange currencies between each other. Small people like us can access that market only through Forex brokers which have a deal with banks to enter into that market.

Without going into details about the Interbank market I will explain what the Forex market is to you. You as a small retail trader who have accessed Forex can make money.

The main goal of small people like you and me on the Forex is not to exchange U.S. dollars for European Euro, but to make money.

How To Make Money

Small people, known as traders, make money by selling or buying currency pairs. Currency pairs consist of two currencies. The U.S. dollar and Euro would make a combination of two currencies and we would have EUR/USD currency pair.

You can make money if you predict if the price of Euro will fall against the U.S. dollar or will the Euro rise against the U.S. dollar.

If your predictions are correct you will make money.

Forex market works that way. It allows you to bet on the outcome of one currency against other currency in a currency pair.

What is Forex Market Structure

While the Forex market is large and it is counted in billion dollars, the Forex industry is the largest market we have in the world.

Take a look into the chart below. You can see what is the size and how larger it is than the stock market on the New York stock exchange.

Forex trading and stock trading market size comparison

This large market structure consists of several levels. Each level has major participants who bring the liquidity to the market.

Forex market structure consists of 3 levels where on the top are the major banks. Below them are financial funds and large companies that want to exchange currencies.

On the bottom are small retail traders. Small retail traders are brokers and we who want to make money by participating on the Forex.

What Are Forex Market Hours

Forex market is not open 24/7 where you could trade at any time of the day and on any day in a week.

As any market, Forex is no exception. Forex has working hours when it is open but it has an advantage compared to the stock market.

Forex market is open 5 days a week. From Monday to Friday.

Forex market working hours depend on the city where you live. But there are general times when the market is open and when it is closed.

When Does the Forex Market Open

Forex market is open from Sunday to Friday. Open time depends on the location you are located.

If you take into consideration that Forex market hours are open when the market in each part of the world is open then you can understand that open time will be different for each country.

Starting position is eastern market where Tokyo and Sidney start.

When Does the Forex Market Open on Sunday

Here is the time when the Forex opens on Sunday for different cities.

Forex Market Opening Time in London

If you live in London then the Forex market opens on Sunday at 23 p.m. But the regular office will open in the morning when the employees come into the office.

Then they start with trading and increase in volatility appears.

Forex Market Opening Time in New York

Forex market in New York opens on Sunday from 5 p.m. EST.

This is the time when you can access the market over a trading platform.

On Monday morning when employees come into the office is a regular working time.

Do not get confused with the open market on Sunday because the market is open even over night when employees are sleeping. That is why you have the market open 24h over 5 days in a week.

When Does the Forex Market Close

Forex market close on Friday at different times in a day. The time depends on the location you are living in.

For example if you live on the east U.S. coast under EST time, you will have a market close on Friday at 5 p.m.

If you live in London then the market will close on Friday at 11 p.m.(London time)

Forex Hours Chart

The image below will give you the best overview of what you can expect regarding time zones.

From the east when Tokyo and Sydney open to the west when London and New York close.

Trading sessions

As you can see there are market hours on the chart above that tells you how the time is divided.

From the left we have Asian market active. During this time we have Asian traders active. Most traded currencies are Asian currency, like Australian dollar and Japanese Yen.

As the market wakes up in Europe and the U.S. we have much more traders and most currencies are traded. In focus we have middle of the overlap between London and New York market hours.

That is the time when the majority of traders are active and the market is most active. 

Forex Market News

While the Forex market news has a large impact on the Forex it is crucial to know when that will happen.

There are Forex market hours when the news is published. Major news announcements are predetermined by the calendar. The best calendar on the Forex news you can find on Forex Factory news calendar.

Market news can have a large impact on the currency value. So, it is important to follow them and especially if you are basing your trading decision on the fundamental factors.

Major Forex market news is published on the overlap between the London and New York market.

That is the time when news from the U.S. market is published and that has an impact on all currencies.


What is the Forex market and what you do on the Forex market is exchanging currencies and making money.

For small retail participants, Forex is the place where the money is. By making correct decisions about price direction you can earn a lot.

Forex market is open 5 days a week for 24h. Open and close time depends on the place where you live.

East part of the world will open earlier and close earlier than the west part of the world. Good thing about Forex market hours is that it is open over night so you can trade even over nights.

While the Forex market is large in size you will have participants from all over the world which gives high volatility. To that volatility there is also news from the Forex that brings more opportunities.

All these benefits make the Forex market a very attractive market to be present on.


For beginners who does not know how and where to start with trading

In the workshop I will tell you

what steps to do in order 

to transform yourself into a trader

Download PDFs for Trading

A download section is a place where you can download PDFs/indicators, MT4 and more, that will help you in trading.

“Disclosure: Some of the links in this post are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. This does not cost you anything extra on the usual cost of the product, and may sometimes cost less as I have some affiliate discounts in place I can offer you”

Frano Grgić

Frano Grgić

A Forex trader since 2009. I like to share my knowledge and I like to analyze the markets. My goal is to have a website which will be the first choice for traders and beginners. Market analysis is featured by Forex Factory next to large publications like DailyFX, Bloomberg... GetKnowTrading is becoming recognized among traders as a website with simple and effective market analysis.

Ultimate Tutorial for Traders

This tutorial have all what is needed about trading. It includes step by step guide:

How to start trading

What are trading basics every trader must know

Risk Management

Foundation strategy with supply and demand


Forex Trading

Forex Trading Guide

1. Forex Trading for Beginners


Pin It on Pinterest

Share This