Forex trading, also known as foreign exchange trading or FX trading, involves buying one currency and selling another with the goal of making a profit.

Introduction

1. Market Overview:
   • The forex market is where currencies are traded globally.
   • Unlike traditional stock exchanges, there is no central physical location for forex trading. Instead, it operates electronically over the counter (OTC).
   • The market is open 24 hours a day, five and a half days a week, spanning major financial centers across different time zones.
2. Currency Pairs:
   • Currencies are traded against each other in pairs. For example, EUR/USD represents the euro against the U.S. dollar.
   • Traders speculate on the exchange rate movement between these pairs.
3. Liquidity and Size:
   • Forex markets are the world’s largest and most liquid asset markets due to global trade, commerce, and finance.
   • Daily global forex trading volume reached an astounding $7.5 trillion in 2022. [This results in almost instant liquidity meaning your trades go through right away.]
4. Participants and Purpose:
   • Institutional firms, large banks, and retail investors participate in forex trading.
   • Reasons include:
     • Hedging: Managing international currency and interest rate risk.
     • Speculation: Betting on geopolitical events or currency movements.
     • Portfolio Diversification: Adding forex exposure to investment portfolios.

Remember, the forex market operates continuously, and its price quotes change constantly. It’s a dynamic and fascinating arena where currencies dance across the digital world! 💱🌎

Source: Conversation with Bing, 4/25/2024
(1) How Do You Start Forex Trading? A Beginner’s Guide - Investopedia
(2) Forex (FX): Definition, How to Trade Currencies, and Examples
(3) Forex for Beginners: An Introduction to Forex Trading - DailyFX

The Forex 3-Session System

A useful article explaining the temporal layout for forex trading.

Traders usually focus on 1 of the 3 sessions Asian, European, US. Algorithms trade 24/7, but the biggest price moves tend to happen when human traders are involved - probably due to emotions.

Session	Market	Hours (pst)	Personality
Asian	Tokyo	04pm - 01am	lower volatility
	Sydney	02pm - 11pm	range bound
European	London	12am - 09am	liquid, trends
America	New York	05am - 02pm	high volatility

Overlapping sessions can be volatile.