Forex, or foreign exchange, is a decentralized global market where currencies are traded. The market is open 24 hours a day, five days a week and is the largest market in the world with an average daily trading volume of $5.3 trillion.
The forex market consists of different currency pairs, with one currency being traded against another. These currency pairs are classified into three main categories: major, minor, and exotic.
Major currency pairs are the most heavily traded pairs and include the US dollar (USD), the euro (EUR), the Japanese yen (JPY), the British pound (GBP), the Swiss franc (CHF), the Canadian dollar (CAD), and the Australian dollar (AUD). These currencies are considered major because they have the largest economies in the world and are the most stable and liquid currencies.
Minor currency pairs, also known as cross pairs, include currencies that are not major but are still traded frequently. Examples of minor currency pairs are the euro against the British pound (EUR/GBP), the Australian dollar against the Canadian dollar (AUD/CAD), and the New Zealand dollar against the Japanese yen (NZD/JPY).
Exotic currency pairs are made up of currencies from emerging markets or countries with smaller economies. These currency pairs are less frequently traded and are considered to be more volatile and risky than major or minor pairs. Examples of exotic currency pairs include the South African rand against the Japanese yen (ZAR/JPY), the Turkish lira against the US dollar (TRY/USD), and the Mexican peso against the Canadian dollar (MXN/CAD).
Forex currencies are traded in different markets around the world. The major forex trading centers are located in London, New York, Tokyo, Sydney, and Frankfurt. Each market has its own trading hours, but there is some overlap between the markets, allowing for continuous trading throughout the day.
The London market is the largest forex trading center in the world, accounting for around 34% of the total daily forex trading volume. The market opens at 3:00 am EST and closes at 12:00 pm EST. The New York market is the second-largest forex trading center, accounting for around 17% of the total daily trading volume. The market opens at 8:00 am EST and closes at 5:00 pm EST.
The Tokyo market is the third-largest forex trading center, accounting for around 6% of the total daily trading volume. The market opens at 7:00 pm EST and closes at 4:00 am EST. The Sydney market is the fourth-largest forex trading center, accounting for around 4% of the total daily trading volume. The market opens at 5:00 pm EST and closes at 2:00 am EST.
The Frankfurt market is the fifth-largest forex trading center, accounting for around 3% of the total daily trading volume. The market opens at 2:00 am EST and closes at 11:00 am EST.
In conclusion, forex currencies are traded in different markets around the world, with major, minor, and exotic currency pairs. The forex market is open 24 hours a day, five days a week, with the major trading centers located in London, New York, Tokyo, Sydney, and Frankfurt. Understanding the different currency pairs and their characteristics is crucial for successful trading in the forex market.
