The foreign exchange market or forex or fx as it is also known, is the largest market in the world. As currencies are traded against each other in established currency parings, there is movement in price, either upwards or downwards of one currency against the other. Spread betting the forex allows you to bet on whether you believe the price of one currency will rise or fall against another, in order to profit.

Market liquidity and volatility

Prices move very quickly in the forex market as billions of pounds are traded. This liquidity gives rise to great volatility in prices at certain times, for example when an interest rate is announced by a central bank, which can have a direct impact on the price of one currency against another. Due to the large volumes of daily transactions, the forex can move very quickly in both directions, therefore it is advisable for you to minimize your risk by placing stop losses via your forex account when you trade.

Forex trading currency pairs

Here is a list of the main or major currency pairings:

EUR/USD – Euro/US Dollar
GBP/USD – British Pound/US Dollar
USD/JPY – US Dollar/Japanese Yen
USD/CHF – US Dollar/Swiss Franc
USD/CAD – US Dollar/Canadian Dollar
AUD/USD – Australian Dollar/US Dollar
NZD/USD – New Zealand Dollar/US Dollar

Forex market currency minor pairs:

These are pairs which are not paired off against the US dollar.

EUR/CHF – Euro/Swiss Franc
EUR/JPY – Euro/Japanese Yen
EUR/GBP – Euro/British Pound
EUR/AUD – Euro/Australian Dollar
EUR/NZD – Euro/New Zealand Dollar
GBP/CHF – British Pound/Swiss Franc
GBP/JPY – British Pound/Japanese Yen
GBP/AUD – British Pound/Australian Dollar
CAD/JPY – Canadian Dollar/Japanese Yen
AUD/JPY – Australian Dollar/ Japanese Yen
AUD/CAD – Australian Dollar/Canadian Dollar
AUD/NZD – Australian Dollar/New Zealand Dollar
AUD/CHF – Australian Dollar/Swiss Franc
NZD/JPY – New Zealand Dollar/Japanese Yen
CHF/JPY – Swiss Franc/Japanese Yen

There are other currency trading pairs which relate to emerging markets, however it is not advisable to begin trading using these, therefore they are not listed above (why trade forex).

Forex market times – when is the foreign exchange open?

The US session begins at 8am EST and goes until 5pm EST.
The European session starts at 3am EST and goes until 1am EST.
The Asian session begins at 5pm EST and is open until 4am EST.

The trading week starts on Sunday evening around 5pm EST and continues until Friday at approximately 4pm EST. The forex market trades 24 hours a day between these times. The fx is closed for trading from Friday evening until Sunday evening.

If you want to trade on volatility, trade the currency pairs when they are open for business, as this is when there will be the most activity and therefore price movement within the respective markets.

Forex market news and price fluctuations

Price fluctuations happen within nanoseconds in foreign exchange trading; therefore your bet can move in your favor or against you very quickly. Market news can also have an effect on price, for example Bank of England announcements on interest rates and American announcements on interest rates and economic policy. You can research the dates of these announcements, and you can then decide whether or not to trade when announcements are due, as these will almost certainly have an effect on the price movement within the forex market.