Forex is known by the initials FX, or as currency trading. Simply put, it is the worldwide free market where you can exchange one currency for another.

Being a worldwide global market, price changes aren’t governed by strict regulations enforced by governments. You cannot regulate a currency market, except to ensure fair trading practices with honest brokers. Thus, if you are a seeker of a free market to trade, FX markets are one of the best.

Buying, selling, and exchanging currencies anywhere and at any time is determined by the changing global market prices for the currency. Wherever you swap one currency for another, whether at a bank, through swaps, or through trading online, exchange rates will always be affected by the globally accepted FX pricings.

It should be considered that any country in the world with a currency, adds to what you can trade in the forex market. With over 100 currency pairs in the markets, a trade usually can trade what they see fit.

Regardless, there tends to be some popular currencies which are traded by the majority in the FX market, mainly due to liquidity. Those would be the US Dollar, British Pound, Euro, Japanese Yen, Australian Dollar, Swiss Franc, and Canadian Dollar.

It is also necessary to consider the factors shaping the global forex market. In addition to trader activity, there are also economic and political conditions of a country to consider. After all, currencies are what is being traded. The state of a country’s affairs, in terms of security and productivity, has a huge impact on the traded markets. From there, it becomes paramount to understand market fundamental forces (which may not be a necessity for other markets).