WHAT IS
FOREX TRADING?

How Does it Work?

Global FX Sessions

What is Forex Trading?

Forex trading, also known as foreign exchange trading or FX trading, refers to the act of buying and selling currencies with the goal of making a profit from changes in exchange rates. It is the largest and most liquid financial market in the world, with a daily trading volume exceeding $6 trillion USD.

Unlike stock markets, the forex market has no central exchange and operates 24 hours a day, five days a week, spanning major financial centers including London, New York, Tokyo, and Sydney.

HOW DOESFOREX TRADING WORK?

Currencies Are Traded in Pairs

In forex trading, currencies are always traded in pairs – for example, EUR/USD or USD/JPY. The first currency in the pair is called the base currency, and the second is the quote currency. The exchange rate tells you how much of the quote currency you need to buy one unit of the base currency.

Example: If EUR/USD = 1.1000, it means 1 euro = 1.10 US dollars.

Types of Currency Pairs

Major pairs: Most commonly traded, includes USD (e.g. EUR/USD, GBP/USD)
Minor pairs: Don't include USD, but involve major currencies (e.g. EUR/GBP, AUD/JPY)
Exotic pairs: One major currency + one emerging market currency (e.g. USD/TRY, EUR/THB)

Examples of Forex Currency Pairs

*Only some forex currency pairs are shown in the image; more options are available.

Why Do Currency Prices Move?

Currency prices fluctuate due to a variety of economic and geopolitical factors, including:

Interest rate decisions by central banks
Economic indicators such as GDP growth, employment figures, and inflation
Political stability, elections, and government policy changes
Market sentiment and global risk appetite

How Can You Trade Forex?

There are several ways to trade forex, including:

Spot market trading – direct exchange of currencies at current market prices
CFD trading (Contracts for Difference) – trade on price movements without owning the currencies
Forex futures and options – typically used by institutions or advanced traders

At FISG, most retail clients trade through CFDs, which allow for:

Leverage trading (e.g. 1:100), meaning you can open larger positions with smaller capital
Long or short positions, allowing potential profit in both rising and falling markets
Real-time execution on a fast and stable trading platform

Note :Leverage amplifies both profits and losses. Risk management is essential.