Forex, FX, or Foreign Exchange, is the simultaneous exchange of one currency with another. The foreign exchange market is the "place" where currencies are traded. The currencies need to be exchanged in order to conduct foreign trade, business, going to another country for tourism or job etc. The Forex market has more daily volume - both buyers and sellers - than any other market in the world. Forex market is available 24-hours a day, five days a week. Furthermore, the Forex Market is the largest financial market in the world with daily reported volume of over $1.5 trillion changing hands between buyers and sellers across the globe. Until recently, forex trading in the currency market had been the domain of large financial institutions, corporations, central banks, hedge funds and extremely wealthy individuals. The emergence of the internet has changed all of this, and now it is possible for average individual investors to buy and sell currencies easily with the click of a mouse through online brokerage accounts.
Extreme liquidity and the availability of high leverage in Forex market have helped the market's rapid growth and made it the ideal place for many traders. Positions can be opened and closed within minutes or can be held for months. Currency prices are based on objective considerations of supply and demand and cannot be manipulated easily because the size of the market make it impossible for even the largest players, such as central banks, to move prices at will.
One unique aspect of this international market is that there is no central marketplace for foreign exchange. The currencies are traded electronically over-the-counter (OTC), which means that all transactions occur via computer networks between traders around the world. The currencies are traded worldwide in the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney - across almost every time zone. This means that when the trading day in one country ends, the forex market is open at some ather center. As such, the forex market is active at any time of the day, with price quotes changing constantly.
The forex market provides plenty of opportunity for currency traders. You purchase or sell one currency for another with the hope of making a profit when the value of the currencies changes in your favor as a result of events that takes place across the globe. However, in order to be successful, a currency trader has to understand the basics behind currency movements.