Forex, Foreign Exchange, or FX are all names to describe the world's trading of currencies. This trading is the buying and selling of money. Forex is the world's largest market, with trades totaling more than USD 3 trillion a day. It is also a twenty four hour operation that begins at 5pm on Sunday and ends at 5pm on Friday. The day will start in Sydney, move to Tokyo, to London, and then finally to New York. However, the highest trades are done in London, which makes it known as the the center of Forex.

Forex can be divided into two types of trade: foreign and speculative. Foreign trade is when businesses, governments, and financial institutions buy and sell products in foreign countries. This would be like a company in the United States paying for a product in Euros despite the fact that the company's money is all in US Dollars. The company would buy the needed number of Euros for its equivalent value in US Dollars.

Trading in Forex does not require you to open foreign bank accounts either. Because of the length of the trade time and the fact that the cities change throughout the day, there is no central exchange center. To trade in Forex you open an account with a market maker, who then deals directly with the other party to buy and sell your currency. This is called over the counter or (OTC). The benefit to you is that market makers have to compete for you business.

Forex allows for trading on the margin and offers a better margin which means you chances of making a good profit increase. For example, your deposit USD 10,000 into your account. If you were to trade with a 1% margin (a 100:1 leverage) then you would have USD 1,000,000 to trade with.

Trading is like exchanging currencies; you are buying your new currency by selling your old currency. On Forex trading is done with a minimum of 100,000 units. Usually trading is done within the major pairs: the US Dollar (USD), Japanese Yen (JPY), Euro (EUR), British Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD), and Australian Dollar (AUD). When viewing an exchange pair, the first currency is the base and its value is always 1; the second currency shows how much you would get for every 1 of the base currency. For example, 1 USD/ .70 EUR means that for every 1 USD you would receive .70 EUR. If you were trading the minimum amount on Forex, you would receive EUR 70,139.27 for USD 100,000.