Understanding Forex: Markets, Leverage and Regulated Access
Originally published 2025-05-18. Translation and editorial review: 14 October 2026. Market figures refer to the original reporting period.
What is Forex?
Foreign exchange is the market for exchanging currencies, including spot, forwards, swaps and options. Retail leveraged forex or CFDs are distinct products with their own costs and regulation; positions can gain or lose value.
Forex Market Features:
Global FX generally trades through the business week; product hours, holidays and maintenance breaks vary.
Can trade both “up” and “down”
Leverage increases market exposure relative to the margin posted.
Leverage magnifies gains and losses. Margin calls, forced liquidation and rapid losses are possible; protections depend on the jurisdiction and product.
BIS reported average OTC FX turnover of about USD 9.5 trillion per day in April 2025 in its revised analysis. This is trading volume across instruments, not a measure of guaranteed retail liquidity or profit.
Which rules apply to FX access?
Rules depend on your residence, the provider’s legal entity and the specific product. A foreign licence does not automatically permit local solicitation, service provision or funding. Confirm local FX-control and derivatives rules before proceeding.
Activities requiring particular scrutiny
Advertising, solicitation or distribution without the required local authorisation.
Managing or pooling other people’s money without the required authorisation.
Transfers or trades that do not comply with applicable exchange-control or product restrictions.
Official reference points
Read the rules published by the central bank and financial regulator serving your jurisdiction. Thai example: https://www.bot.or.th/th/our-roles/financial-markets/foreign-exchange-regulations/forex.html www.bot.or.th
Verify the provider’s legal name, permissions and warnings in the relevant regulator’s official register. www.sec.or.th
A licence from another country does not override the laws where the customer resides. Thai official FAQ: https://www.bot.or.th/th/faqs/faqs-21.html www.bot.or.th
Where to research eligible access
Check authorised provider registers, then confirm that the firm accepts your residence and is permitted to offer the exact product to you. Registration in ASIC, FCA or CySEC alone is not sufficient.
Bank currency conversion for payments or savings differs from leveraged retail trading. Confirm the service purpose, exchange rate, spread and local rules with an authorised institution.
⚠️ Caution
License Verification: Before Opening an Account It is worth checking that the broker has a license from a reliable regulatory agency.
Avoid Unlicensed Brokers: Trading with unlicensed brokers carries the risk of being scammed.
Tax and reporting obligations depend on tax residence, instrument, source of income and applicable rules. Seek qualified advice where required.
Summary
Checks before making any commitment
Confirm product legality, eligibility and provider permissions first.
Use authorised currency-exchange channels for permitted purposes.
Study properly before investing.
Activities requiring particular scrutiny
Solicitation without a license
Raising Forex funds using a pyramid scheme.
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