What is Forex?

Beginner

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The foreign exchange market (Forex or FX) is the world's largest and most liquid financial market, operating 24 hours a day, 5 days a week. Trillions of dollars are exchanged daily.

Currencies are traded in pairs — for example EUR/USD, GBP/USD, USD/JPY. The first currency is the *base currency*, the second is the *quote currency*.

When you buy EUR/USD, you are buying Euros and selling US Dollars simultaneously.

Knowledge Check

8 questions

1.What does "Forex" stand for?

Foreign ExchangeFormal ExpertFutures ExchangeFinancial Exchange

2.How many days a week does the Forex market operate?

4 days5 days6 days7 days

3.In the pair EUR/USD, which currency is the base currency?

USDEURNeitherBoth equally

4.In the pair EUR/USD, which currency is the quote currency?

EURUSDNeitherBoth equally

5.What happens when you buy EUR/USD?

You buy US Dollars and sell EurosYou buy Euros and sell US DollarsYou buy both currencies at onceYou sell both currencies at once

6.What makes Forex the largest financial market in the world?

Its limited trading hoursIts daily trading volume of trillions of dollarsIts small number of participantsIts single currency system

7.How many hours a day does the Forex market operate?

8 hours12 hours16 hours24 hours

8.In GBP/USD, which currency is the quote currency?

GBPUSDNeitherBoth

Next →What is Gold (XAUUSD)?

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