The forex (foreign exchange) market is the world's most liquid financial market, enabling the trade in pairs of national fiat currencies, such as the U.S. dollar (USD), euro (EUR), Canadian dollar (CAD), Singapore dollar (SGD), Swedish krona (SEK), Japanese yen (JPY) and many more. Trades and positions on the forex market are all expressed in pairs of currencies (e.g., USD/EUR), with the first ticker called the base currency and the second one called the quote currency. A forex pair price indicates how much of the quote currency you need to pay to buy one unit of the base currency. For instance, a listing of USD/EUR 0.9 means that to buy one U.S. dollar, you'd need to pay 90 Euro cents.
Euro and U.S. dollar: EUR/USD
U.S. dollar and Japanese yen: USD/JPY
There are some major differences between the way the forex operates and other markets such as the U.S. stock market.
There's no cut-off as to when you can and cannot trade. Because the market is open 24 hours a day, you can trade at any time of day. The exception is weekends, or when no global financial center is open due to a holiday.
The forex market allows for leverage up to 1:50 in the U.S. and even higher in some parts of the world. That means a trader can open an account for $1,000 and buy or sell as much as $50,000 in currency. Leverage is a double-edged sword; it magnifies both profits and losses.
