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TrustFinance
Oct 15, 2026
18 min read
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Every business day, approximately 9.6 trillion US dollars change hands in the foreign exchange market. However, according to the BIS's final survey published in 2026, transactions made by non-financial clients themselves, including import-export companies and general currency users, account for less than 5 percent of the total (BIS Triennial Survey 2025)
This figure answers the question of what Forex is better than textbook definitions. This market primarily belongs to banks and financial institutions. Retail traders opening trading apps on their mobile phones are at the very end of a long chain.
This article explains the market mechanism, how to read currency pairs and prices, common terms for beginners, hypothetical calculation examples, and what Thais need to know before starting. All content is for knowledge purposes, not investment advice, and does not solicit trading.
Forex is the international currency exchange market, short for Foreign Exchange, or simply FX. All trades are always in pairs, buying one currency while selling another, such as EUR/USD. This market has no central exchange like a stock market. Prices are generated by dealer banks and service providers trading directly with each other through a global network.
When you exchange Japanese Yen at a money changer before flying to Japan, that is also a transaction in the Forex market, just at the smallest end. You need the Yen for actual use, not hoping for profit from currency fluctuations.
However, when Thais say "playing Forex," it usually refers to something else: opening a buy or sell position on a currency pair through a broker's platform, hoping to profit from price differences, without actually taking delivery of that currency. Both use prices from the same market, but the risks and legal statuses are vastly different.
The Thai stock market has the Stock Exchange of Thailand as its center, where all buy and sell orders enter a single system, resulting in a single price. Forex has no such thing.
It's an OTC (Over the Counter) market, simply meaning counterparties agree to trade directly with each other. Bank A offers a price to Bank B via electronic systems or phone. If they agree, the deal is done, no central exchange needed.
Imagine it as several concentric circles.
The innermost circle consists of large banks acting as dealers, constantly offering buy and sell prices to each other. BIS calls this group "reporting dealers." Next are other financial institutions, such as smaller banks, funds, insurance companies, hedge funds, and systematic trading firms. The outermost layer consists of non-financial clients, including companies that need to pay for goods in foreign currency, government agencies, and individuals.
Central banks are also in this market, but their role is different. Central banks do not trade for profit but intervene to maintain currency stability or manage foreign reserves occasionally.
The BIS, or Bank for International Settlements, surveys this market every three years in collaboration with central banks worldwide. The results for April 2025 were released as preliminary figures on September 30, 2025 (BIS Press Release), and the final tables were published in June 2026. The figures below are from the final tables.
| Counterparty Group (vs. reporting dealers) | Average Daily Turnover (billions of USD) | Approximate Share |
|---|---|---|
| Between reporting dealers | Approx. 4,372 | Approx. 46 percent |
| With other financial institutions | Approx. 4,780 | Approx. 50 percent |
| With non-financial clients | Approx. 443 | Approx. 4.6 percent |
| Total | Approx. 9,595 | 100 percent |
Source: BIS Triennial Survey 2025, final tables. Proportions calculated from values in the table.
If categorized by transaction type, the picture is equally interesting. Spot transactions, where actual currency is exchanged within approximately 2 business days, amount to around 2,957 billion dollars per day. Meanwhile, FX swaps, which banks and companies use for liquidity management, amount to around 3,986 billion dollars per day, even more than spot. This means the largest chunk of money in this market does not come from daily currency speculation as many people imagine.
The BIS does not categorize retail traders separately. Retail transactions appear in the figures through brokers and service providers in the middle layer.
The typical path is that you place an order through a broker's platform. The broker may take on the risk themselves or pass it on to liquidity providers in the inner layer. The price you see is therefore the price offered by the broker, not a central market price, because a central Forex price does not exist. Each broker can thus display slightly different prices at the same time.
Currency pairs are written as two currencies separated by a slash (/). The first currency is called the Base Currency, and the second is the Quote Currency. The price indicates how many units of the Quote Currency 1 unit of the Base Currency can be exchanged for.
Suppose EUR/USD is at 1.1000. This means 1 Euro can be exchanged for 1.1000 US Dollars. If the price moves up to 1.1050, it means the Euro has strengthened against the Dollar, or conversely, the Dollar has weakened against the Euro.
Pressing Buy EUR/USD therefore means expecting the Euro to strengthen against the Dollar, while Sell means expecting the Euro to weaken. In Forex, opening a Sell position is as easy as opening a Buy position.
On the platform, you will always see two prices, for example, 1.1000 / 1.1002 (hypothetical figures).
The difference of 0.0002 is the spread, which in this example is 2 pips. This is the initial cost paid immediately upon opening a position. When you open a Buy position, you will always see a negative status equal to the spread first. Many beginners are surprised by this, but it's a normal mechanism.
The BIS final tables show that USD/EUR is the largest pair, accounting for approximately 21.2 percent of total turnover, followed by USD/JPY at around 14.3 percent (BIS Triennial Survey 2025). Pairs involving the US Dollar are known as major pairs in the industry.
Heavily traded currency pairs usually have high liquidity, so their spreads are typically narrower than less traded pairs during normal times. However, this does not mean that any pair is easier to trade or less risky. The prices of all pairs can swing sharply when major news breaks.
A currency's value is a comparative price between two economies. Anything that changes the market's perception of one country relative to another can move currency prices. The main factors analysts use fall into four groups:
No single factor can predict direction with certainty. Often, the market moves against the news because prices have already reflected expectations. Therefore, this article does not indicate which currency will rise or fall.
| Term | Brief Meaning | Why Beginners Need to Know |
|---|---|---|
| Pip | Unit of price movement. For most pairs, it's the 4th decimal place (0.0001); for JPY pairs, it's the 2nd. | Used to calculate profit/loss and spread. |
| Lot | Unit of trade size. 1 standard lot equals 100,000 units of the Base Currency. | Lot size determines how many dollars 1 pip is worth. |
| Spread | The difference between Bid and Ask prices. | An immediate cost every time a position is opened. |
| Leverage | Using a small amount of margin to control a position many times larger. | Amplifies both profits and losses. |
| Margin | Money set aside as collateral for an open position. | If account funds are insufficient, you'll face a margin call and your position will be closed. |
| Swap | Interest earned or paid when holding a position overnight. | Holding for a long time can accumulate costs. |
Each term has much more in-depth detail. TrustFinance has separate articles on pip, leverage, spread, and swap that explain step-by-step calculations. This table is merely a map to understand where each term fits into the bigger picture.
All figures in this section are hypothetical to explain the mechanism, not actual prices or trading results, and do not include spread, commission, or swap.
Suppose you open a Buy EUR/USD position of 0.20 lot at a price of 1.1000. A 0.20 lot equals 20,000 Euros. For a pair where the Quote Currency is the Dollar, 1 pip of a 0.20 lot is worth approximately 2 US Dollars.
If the price rises from 1.1000 to 1.1030, it's a 30-pip movement. The profit is 30 × 2 = 60 US Dollars.
If the price falls from 1.1000 to 1.0970, it's also a 30-pip movement, but this time it's a loss of 60 US Dollars.
Now let's look at what leverage does. A 20,000 Euro position at a price of 1.1000 is worth approximately 22,000 US Dollars. If the account uses 1:100 leverage, the margin set aside would be around 220 US Dollars. A loss of 60 US Dollars therefore equals about 27 percent of that margin, even though the price moved by only about 0.27 percent.
If the account only has 300 US Dollars, a 60 US Dollar loss means one-fifth of the account is gone from a single price movement. This is why high leverage causes beginner accounts to deplete quickly, not because the market is cruel, but because the mathematics of leverage works the same way in both directions.
The term "Forex trading" covers several instruments. Beginners should distinguish between these three types:
| Instrument | Actual Delivery of Currency? | Primary Users | Points to Watch Out For |
|---|---|---|---|
| Spot | Actual delivery, generally within approx. 2 business days. | Banks, corporations, those who need the actual currency. | Retail traders have almost no direct access. |
| Forward / Futures | Price agreed today, delivery or settlement in the future. Futures are traded on an exchange; Forwards are agreed upon privately. | Import/export companies looking to lock in costs. | Have expiration dates, and contract sizes can be large. |
| CFD | No delivery; only the price difference is settled. | Retail traders who trade through brokers. | Can use high leverage. The counterparty is the broker, so risk also depends on the broker. |
Most platforms used by retail traders offer currency pairs in the form of CFDs or similar difference-settled contracts, even if the screen says "Spot." This is important because your counterparty is the broker, not the market. If you want to see the detailed differences between these three forms through a gold example, you can read Gold Spot vs Futures vs CFD: What's the Difference? The same mechanism applies to currency pairs.
Many Thais understand Forex as trading the Thai Baht against the US Dollar, but BIS data tells a different story.
In the final tables, the Thai Baht is on one side of transactions totaling approximately 48.4 billion US Dollars per day, representing a share of about 0.5 percent (BIS counts total turnover as 200 percent because each transaction involves two currencies). This is an increase from approximately 31.0 billion US Dollars in the 2022 survey (BIS Triennial Survey 2025).
Compared to the US Dollar, which is involved in approximately 89 percent of transactions, the Thai Baht is a very small currency in the global market. Most currency pairs retail traders see on platforms are therefore major pairs like EUR/USD or USD/JPY, not the Thai Baht. The volatility of the Thai Baht seen in the news is a different matter from what happens in most trading accounts.
This section needs to be clear, as many broker websites present information in a way that can be misleading.
The Bank of Thailand confirms that it has no policy to issue Forex business licenses for speculative purposes to anyone, and Forex is not under the supervision of the SEC (Securities and Exchange Commission) because it is not a security. As a result, no Thai authority regulates retail Forex trading. Licenses obtained by brokers from foreign authorities provide protection under the laws of those countries, but do not make their services regulated in Thailand.
The legal framework, penalties, and the distinction between traders, business operators, and solicitors are explained in detail in Is Forex Trading Illegal? Latest Legal Status in Thailand.
Important Note: Forex trading has no license or regulation from any authority in Thailand. If you encounter problems with a broker, avenues for complaint in Thailand are very limited.
Forex is a high-risk investment. There are four points that beginners often underestimate:
You can lose all your capital, and in some cases, more than you deposited. If prices jump sharply and the system cannot close your position in time, your account may go into negative balance. Whether you have to pay the negative amount depends on whether the broker has a negative balance protection policy. You can read about the mechanism at What is Negative Balance Protection?
Leverage turns small mistakes into big problems. As seen in the calculation example, a price movement of less than 1 percent can cause a significant portion of your account to disappear.
Your counterparty is the broker. Your money is held with a private company abroad. Therefore, the risks are not just about price, but also include issues with withdrawals and the company's trustworthiness. Before opening an account, you should use TrustFinance's broker checklist.
There are no guaranteed returns. Anyone who promises certain profits from trading or offers to trade on your behalf for fixed returns should be seen as a red flag.
Forex is a currency trading market genuinely used by banks and corporations for international trade. The market itself is not gambling. However, opening short-term speculative positions with high leverage without a risk management plan can yield results similar to gambling. The difference lies in how it's used, not the market itself.
Stocks represent ownership in a company, traded on a regulated stock exchange. Forex, on the other hand, is the trading of comparative prices between two currencies, with no central exchange, and in Thailand, no regulatory body oversees retail trading. Sell positions in Forex can be opened as easily as Buy positions, and leverage used is often much higher than in stocks.
It operates continuously 24 hours on business days, from early Monday morning to early Saturday morning Thai time, and closes on Saturdays and Sundays. Actual opening and closing times shift with daylight saving time changes abroad. You can see the conversion to Thai time at What Time Does the Forex Market Open?
Start by fully understanding the mechanisms, including currency pairs, pips, lots, leverage, margin, and costs like spread and swap. Then practice with a Demo account using virtual money, which doesn't involve real funds. However, remember that results in a Demo account do not guarantee results in a live account.
TrustFinance cannot state that Forex is legal in Thailand. The Bank of Thailand has no policy to issue Forex business licenses for retail traders, and no Thai authority regulates it. Operating a business and soliciting others may incur legal penalties. Details can be found in the legal status article linked above.
Many brokers set low minimum deposit requirements, but a broker's minimum is not necessarily the amount suitable for you. The more important question to ask is, what amount of money can you afford to lose entirely without affecting your life, because Forex can result in total loss.
Forex is the largest currency exchange market in the world, but it is primarily a market for banks and financial institutions. Retail traders access it through brokers, mostly in the form of CFDs where the broker is the counterparty.
Understand these three things before proceeding: where prices come from, how costs and leverage work, and that there is no regulatory body for this trading in Thailand. If you decide to study further, always use TrustFinance to check information and broker reviews first.
This article provides information for educational purposes, not investment advice. Trading Forex and CFDs carries high risk and may result in the loss of all your capital.
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