How the market is structured
Centralized vs decentralized markets
3 min
Stock markets are centralized: shares of a company trade on a specific exchange (B3, the NYSE, the Nasdaq) with one official price at any moment.
Forex is different — it is decentralized, also called an over-the-counter (OTC) market. There is no single exchange. Instead, trading happens through a global network of banks, brokers and electronic platforms connected to one another.
What that means in practice
- No single price. Quotes can differ very slightly between providers, though competition keeps them extremely close.
- No central clearing house. Your broker is your counterparty or routes your order to liquidity providers.
- Enormous liquidity. Because so many participants are connected, major pairs can absorb very large orders with minimal price impact.
- 24-hour access. With no physical exchange to open and close, the market runs continuously through the trading week.
Why it matters to you
Because forex is OTC, your choice of broker matters more than in stocks — the broker’s pricing, execution quality and regulation directly shape your trading costs and safety. We cover how to evaluate brokers in the next chapter.
This content is for educational and informational purposes only and is not investment, financial, tax or legal advice. Trading and investing carry risk, including the possible loss of capital. Any performance shown by third-party tools is hypothetical and not a promise of future results. Do your own research and consider professional advice before making any decision.