Rakota TraderRakota TraderThe foreign exchange market (forex or FX) is the global marketplace where currencies are traded. It’s the largest financial market in the world — operating 24 hours a day, five days a week — and connects banks, institutions, governments, and individual traders worldwide.
Unlike stock exchanges that are centralized, the forex market is decentralized — meaning there’s no single physical location. Trading occurs electronically over-the-counter (OTC) between participants through networks of banks and brokers.
Currencies are traded in pairs, such as EUR/USD (Euro vs. US Dollar). The first currency (EUR) is called the “base currency,” and the second (USD) is the “quote currency.” The quoted price tells you how much of the quote currency is needed to buy one unit of the base currency.
Example: If EUR/USD = 1.1000, it means 1 Euro equals 1.10 U.S. Dollars.
Forex operates across four major trading sessions — Sydney, Tokyo, London, and New York. This structure allows for continuous trading as markets in different regions open and close throughout the day. The London and New York sessions are the most active due to higher volume and liquidity.
Traders speculate on whether one currency will strengthen or weaken against another. If they believe the Euro will rise against the Dollar, they buy EUR/USD. If they believe it will fall, they sell. Profits or losses depend on the difference between the entry and exit prices.
⚠️ Remember: The forex market involves significant risk. Understanding the market structure and using proper risk management is essential before trading live funds.
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