Forex, a portmanteau of foreign and exchange, is where banks, businesses, governments, investors, and individuals buy or sell currencies. Whenever you purchase something in another currency or exchange cash to get the local money of your vacation destination, you’re taking part in the forex or foreign exchange (FX) market. Businesses and individuals often do this while investors trade currencies to profit from fluctuating exchange rates.

Forex is the largest and most liquid market in the world. Participants in this global electronic marketplace traded about $7.5 trillion per day in 2022, far exceeding the daily trading volumes of the world stock market