Lesson 2 of 69
How the forex market works
7 min read
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Unlike a stock exchange, forex has no single building and no central exchange. It is an over-the-counter (OTC) network: banks, brokers, funds and traders quoting prices to each other electronically around the clock.
24 hours, 5 days a week
The market opens Monday morning in Sydney and closes Friday evening in New York. As one financial centre goes to sleep another wakes up, so there is always somewhere quoting a price. Crypto is the exception — it never closes, not even at weekends.
Major sessions (UTC)
Why the session matters
- Sydney / Tokyo (Asian session): quieter ranges. AUD, NZD and JPY pairs are most active.
- London: the largest session by . EUR and GBP pairs get their biggest moves here.
- London–New York overlap (roughly 13:00–17:00 UTC): the busiest and most liquid window of the day.
- New York: US data releases land here, so USD pairs, gold and indices can move sharply.
Beginner tip
More means tighter and smoother price action. If you can only trade a couple of hours a day, the London–New York overlap is usually the best value.
Decentralised means prices differ slightly
Because there is no single exchange, your broker's price may differ by a fraction from another's. This is normal. What matters for you is the — the between the buy () and sell () price — because that is the cost you pay to enter a trade.
Key takeaways
- There is no single exchange — forex is decentralised and trades over-the-counter between banks and brokers.
- The market runs 24 hours a day, five days a week, following the sun across the major sessions.
- Price moves when the balance between willing buyers and willing sellers shifts.
- Your broker quotes you a bid and an ask; the gap between them is the spread you pay.
Knowledge check
3 quick questions — your best score is saved to your progress.
1. Where does forex trading physically take place?
2. When is the forex market open?
3. What is the spread?
Progress is saved on this device.
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