Decentralized Exchange or DEX is defined as a place where cryptocurrencies are traded directly person-to-person, without a company holding their money or crypto for them.
Compare a decentralized exchange with a centralized exchange. In a centralized exchange, the customer gives their crypto to the exchange and trusts them to hold it safely. The exchange lets them move the value of that deposit around and later withdraw it in the cryptocurrency they represent.
A decentralized exchange doesn’t require you trust someone to hold your crypto for you. This positive quality is known as “trustless”.