One key difference in forex trading is that currencies are always traded in pairs. This means that when you trade forex, you’re buying one currency while simultaneously selling another. For example, in the EUR/USD pair, you are buying Euros (EUR) while selling US Dollars (USD). Unlike other financial markets where individual assets (like stocks) are traded, the value of a currency is always relative to another currency.

Global Nature of Forex

The forex market is more global than other markets because it involves the currencies of countries all over the world. Participants include governments, central banks, multinational corporations, financial institutions, and retail traders. This international scope is why the forex market operates 24 hours a day—trading follows the opening and closing of financial centers across different time zones, from Asia to Europe to North America.

Around-the-Clock Operation

Since the market is decentralized and doesn’t rely on a central exchange, it remains open from Monday morning in the Asia-Pacific region until Friday evening in New York. As a result, traders can respond to economic events and market movements in real-time, even outside traditional business hours, offering greater flexibility compared to stock markets, which operate on fixed schedules.