What is a forex market?

Forex markets exist as spot (cash) and derivatives markets, offering forwards, futures, options, and currency swaps. Some market participants use forex to hedge against international currency and interest rate risk, speculate on geopolitical events, and diversify portfolios, among other reasons.

What is fair value in forex?

In the end, fair value applied to Forex means studying the total value of a country, which is translated into their currency’s purchasing power. Now, regarding how exactly you can study the fair value of a currency pair, I can point out three main methods.

What is foreign exchange trading?

Foreign exchange trading—also commonly called forex trading or FX—is the global market for exchanging foreign currencies. Forex is the largest market in the world, and the trades that happen in it affect everything from the price of clothing imported from China to the amount you pay for a margarita while vacationing in Mexico.

How are forex prices determined?

Instead of trading via a central exchange such as the New York Stock Exchange or London Stock Exchange, forex prices are determined by interbank trading – the buying and selling of currencies between banks constantly, all over the world. The currency market is open 24 hours a day during market hours.