Forex (FX), or foreign exchange, is a global market with a trading volume of more than 3 trillion dollars. Regarding size and liquidity, it is a top financial market. Moreover, the forex market is totally decentralized.
The early 1970s saw the formation of the Forex. The failure of the Bretton Woods system served as its catalyst. Nixon then exercised his freedom to remove the currency from the gold standard. This made it possible for supply and demand to control exchange rates. The new era of the Forex started in this manner.
Participants, such as day traders, brokers, and foreign banks, among many others, set the exchange rate. However, significant institutions like commercial banks typically influence the currency rate most. This is because they can communicate directly with each other or through a broker.
The magnitude of the forex market is the primary factor making it distinctive. The volume of trading is typically very high.
In the world’s largest financial cities, the forex market is open twenty-four hours a day, seven days a week. This essentially means that you can purchase or sell currencies at any time.
