Unlike other markets such as commodities, shares, and cryptocurrencies, forex maket doesn’t require an exchange before trading can be effected. It is a trade between two persons, in an over-the-counter market. It is operated by major banks across four centers, namely, London, New York, Tokyo, and Sydney. These centers are in different time zones. Since the market is not centralized in a particular location, you can trade forex 24/5.
There are 3 types of forex market:
● Spot forex market: This type of forex trade takes place on the spot; hence, the name. It is the physical exchange of different currencies between friends or family members.
● Forward Forex Market: In this type of market, an agreement is usually reached for the buying/selling of a particular currency at a future date.
● Future forex maket: This is very similar to the forward forex maket, only that it is legally binding on both parties that want to execute the trade.