Unlike stock markets, which are centralized and operate through organized exchanges (like the New York Stock Exchange or NASDAQ), the forex market is decentralized and operates over-the-counter (OTC). This means there is no central exchange or physical location where all forex trades take place. Instead, currency trades happen directly between participants—such as banks, financial institutions, corporations, and retail traders—using electronic networks.
In the OTC market, trades occur globally via broker platforms or directly between two parties. Because of this decentralized structure, the forex market can function 24 hours a day across various time zones. It allows participants to trade from anywhere in the world without being tied to the operating hours of a specific exchange, making it highly accessible and flexible for traders at any time of day.