What Is Forex: The Global Market That Never Sleeps

School Preschool01/01/2026

By Iriss LeeFounder & Editor1 January 20263 years trading forex. Writes every KoboFX guide and review. Full profile →

Risk warning: Forex trading carries high risk. You can lose all the money you put in. This article teaches how the market works. It is education, not financial advice. Only trade with money you can afford to lose.

Forex means "foreign exchange". It is the act of changing one currency into another.

When you travel from London to Paris and change your £ (pounds) into € (euros), you take part in forex. But most forex trading is not travel money. Banks, companies, and everyday people buy and sell currencies to profit from price changes.

An airport exchange counter. You hand over dollars on the left, the rate board in the middle reads €1 = $1.08, and you receive euros on the right. Forex trading works on the same idea at a larger scale: banks and traders exchange currencies when the rate moves.

The market never sleeps

The forex market opens on Monday morning in Sydney. It then moves through Tokyo, London, and New York. When New York closes, Sydney opens again. This cycle runs 24 hours a day, 5 days a week.

Sessions below use WAT (GMT+1). London runs roughly 8am to 5pm WAT (8am GMT, 3am ET). New York runs roughly 1pm to 10pm WAT (12pm GMT, 8am ET).

The 24-hour cycle in WAT. Sydney opens the week, Tokyo follows, then London and New York carry the busy daylight hours. The active window falls in the afternoon and evening (WAT/GMT+1), with the 1pm–5pm overlap busiest.

Why do people trade forex?

Currencies move up and down every day. A trader tries to buy a currency low and sell it high.

Example: if $1 = $1 today and $1 = $1.03 tomorrow, a trader who bought dollars made a small profit.

A warning before you start

Forex is risky. Prices can move fast. Many beginners lose money. Never borrow money to trade. Never use money you need for rent, food, or school fees.

A caution sign. Only risk money you can afford to lose — never rent, food, or school fees money. The red line marks money you must never touch; the green line marks spare money only.

What comes next

The next lesson, Currency Pairs: How Money Is Priced in Quotes, looks at why currencies are always traded in twos. When you are ready to pick a broker, read our Complete Guide to Choosing a Forex Broker (2026).

Bottom line: Know forex runs 24/5 via London 8am–5pm WAT, trade only what you can lose, or you risk rent money on 24-hour risk. Related guides: Choosing a Forex Broker, Forex Safety and Avoiding Scams.