The global market where currencies are traded against each other.
Forex (FX) is the global decentralized market where currencies are traded. With trillions of dollars in daily volume, forex is the largest financial market globally. Forex involves trading currency pairs (EUR/USD, GBP/JPY, etc.), using leverage to control large positions with small capital. While traditional investors buy stocks or bonds, forex traders speculate on currency movements driven by interest rates, inflation, geopolitical events, and economic data. Forex is accessible to retail traders through online brokers but is highly speculative and risky—leverage amplifies both gains and losses. Most currency transactions for businesses involve hedging against exchange rate risk rather than speculation. Understanding forex is helpful for international business and travel but it's generally not recommended for typical personal investors.