TRADING GLOSSARY

Forex: the world’s largest financial market

The foreign exchange market (forex or FX) is a decentralized global marketplace where currencies are traded. With over $7.5 trillion in daily turnover, it is the largest and most liquid financial market in the world, dwarfing the stock market by a factor of 30.

How forex works

Currencies are traded in pairs. EUR/USD represents the euro against the US dollar. If you buy EUR/USD at 1.1000 and it rises to 1.1050, you have made 50 pips of profit. The first currency (EUR) is the base currency, and the second (USD) is the quote currency.

Major currency pairs

The most traded pairs are EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD, and NZD/USD. These “majors” have the tightest spreads and highest liquidity. Cross pairs (e.g., EUR/GBP, GBP/JPY) and exotic pairs (e.g., USD/TRY, EUR/ZAR) are also available but with wider spreads.

Trading sessions

Forex trades 24 hours a day, 5 days a week through three overlapping sessions: Asian (Tokyo), European (London), and American (New York). The most liquid and volatile period is the London-New York overlap (1:00-5:00 PM GMT). Each session has its own characteristics and favored pairs.

AskTrade’s research covers major currency pairs with full multi-agent analysis including macro-economics, which is particularly critical for forex trading.

Disclaimer: This is for educational purposes only and does not constitute financial advice. Trading involves significant risk of loss.

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AskTrade analyses are AI-generated and do not constitute financial advice.