London, England: Where the Forex Market Lives

The foreign exchange (forex) or currency market does not exist like most other financial markets you may be familiar with, such as the New York Stock Exchange or the NASDAQ. Both of these markets have a central location and a central exchange, but the forex market exists as a global financial market instead of a centrally located one.

The term that we use for this is 'over-the-counter' (OTC), meaning that the market itself exists as a large teeming collection of interconnected bank computer servers (which is also the reason that this market is commonly referred to as the interbank market). If you want to trade the foreign currency market, instead of finding a broker that can 'plug you in' to a centrally located exchange (as you would do with the stock market), you actually use you own internet-enabled computer to gain access to your trading platform via a big bank's computer servers. In effect, since the forex market itself IS all of these computers, you are actually enlarging the market when you choose to add your own