A FOREX transaction that is individually negotiated between two counterparties to trade a particular currency at an agreed-upon price and on an agreed-upon date. In other words, one counterparty (the buyer) agrees to buy a prespecified amount of the underlying currency at a specific exchange rate from the other (the seller). This forward is settled on any pre-agreed date, which is three or more business days after the trade date. FOREX forwards (FX forwards) are traded over the counter, that is, via a network of banks and brokers.

Unlike FX futures contracts, forward contracts are not standardized (the terms and conditions of each contract are negotiated separately. Forwards doesn’t increase the liquidity of intraday speculative currency trading.