Forex trading, or foreign exchange trading, is done globally across decentralised, over-the-counter (OTC) markets. Unlike stock markets that operate on centralised exchanges, forex trading takes place electronically between participants via computer networks — 24 hours a day, five days a week. This global structure allows for seamless currency trading across financial centres in major cities such as London, New York, Tokyo, and Sydney.

Key Takeaways

• Forex trading is decentralised and done over-the-counter (OTC) worldwide.
• Major trading hubs include London, New York, Tokyo, and Sydney.
• Forex transactions occur through brokers, banks, and electronic platforms.
• Trading can be done on desktops, mobile apps, and web-based terminals.
• Retail traders primarily access forex through online brokers and platforms.

The Global Forex Market Structure

Forex trading does not occur on a single exchange. Instead, it functions as a global network of participants that includes:

• Central banks and governments
• Commercial and investment banks
• Hedge funds and institutional investors
• Retail forex brokers and traders

All of these parties interact in a decentralised environment using electronic communication networks (ECNs), liquidity providers, and broker platforms.

Top Global Forex Trading Centres

London

• Handles around 40% of global forex volume
• Peak trading hours: 8:00 AM – 4:00 PM GMT
• Known for deep liquidity and institutional trading

New York

• Second-largest forex trading hub
• Trading overlaps with London between 12:00 PM – 4:00 PM GMT
• High volume in USD-related pairs

Tokyo

• Asia’s key trading hub
• Active during 12:00 AM – 9:00 AM GMT
• Popular for trading JPY and AUD pairs

Sydney

• Smallest of the four but important for starting the trading day
• Active during 10:00 PM – 7:00 AM GMT

This continuous cycle ensures that forex trading is available 24 hours a day, moving from one time zone to another without interruption.

Where Retail Traders Do Forex Trading

Most retail traders conduct forex transactions through:

• Online brokers offering platforms like MT4, MT5, or cTrader
• Mobile trading apps for iOS and Android
• Web-based terminals provided by brokerages
• Regulated environments such as the UK’s FCA, Australia’s ASIC, and others

Retail participants also engage in forex through structured Forex Course programmes, which prepare them to trade effectively using demo accounts and live trading environments.

Real-World Example: Where a Beginner Trader Operates

A beginner trader in Nigeria opens an account with a regulated UK broker. They log into MetaTrader 5 via mobile, trading EUR/USD at 8:30 AM GMT — during the London session. Their broker routes orders through a liquidity provider in New York. Even though the trader is in Nigeria, their orders interact with global markets in real-time.

This illustrates the decentralised and borderless nature of forex trading.

Frequently Asked Questions

Is forex trading done on an exchange?

No. Forex trading is decentralised and occurs over-the-counter (OTC) via global electronic networks.

Where are the main forex trading hubs located?

London, New York, Tokyo, and Sydney are the four main global trading hubs.

Can I trade forex from any country?

Yes, as long as forex trading is legal in your country and you have internet access and a brokerage account.

Where do most retail traders execute forex trades?

Retail traders use online brokers that offer access through desktop platforms, web terminals, and mobile apps.

Do I need to be in a financial centre to trade forex?

No. Forex trading is global and accessible online, so location doesn’t limit participation.