| Forex or foreign exchange is over-the-counter | | | | fixed while in modern forex markets, there are |
| trading market for trading currencies across world. | | | | floating exchange rates. The rates of exchange |
| The forex determines relative values of various | | | | were fixed as per the Bretton Woods System and all |
| currencies. The main role of forex is to facilitate | | | | counties followed it. But in modern foreign exchange |
| international trade and investment. It is done by | | | | market, rates of exchange are constantly fluctuating |
| converting one currency to another so that traders | | | | and a person purchasing a currency is required to pay |
| across world are able to make transactions. Forex is | | | | the current rate of exchange prevalent at time of |
| the largest trading market in the world and its | | | | trading. The modern foreign exchange market |
| participants include large banks, central banks, | | | | began forming in 1970s when more and more |
| corporations, governments, currency speculators | | | | countries started shifting to floating exchange rates. |
| along with some other major financial institutions. | | | | |
| This is the most liquid financial market in the world. | | | | There are some special features of forex that |
| As more and more people are joining this trade, the | | | | make it unique. The volume of trading in forex is |
| average volume of global forex is growing rapidly and | | | | very high and therefore high liquidity. This trade is |
| continuously. | | | | dispersed across all geographical locations in the world. |
| | | | | Forex operates for all 24 hours, except during |
| In a typical forex transaction, one party purchases a | | | | weekends. The fluctuating rates of forex are a result |
| particular quantity of a currency and pays a particular | | | | of various factors. This is a market where the |
| quantity of another currency in exchange. In earlier | | | | relative margin of profits is very low as compared to |
| forex markets, the rates for exchange remained | | | | other markets that have fixed income. |