The retail off-exchange foreign currency market (commonly referred to as FOREX or FX) is the largest financial marketplace in the world with an estimated daily turnover in excess of $1.9 trillion USD. Participants in the FOREX market include banks, institutional investors, corporate treasurers, and retail speculators.

The most actively traded currencies are the so-called “majors” - the US dollar, the Canadian dollar, the Australian dollar, the Swiss franc, the Japanese Yen, the British pound, and the Euro. The economies that these currencies originate from have several key factors in common – they are all recognized as having stable governments, esteemed central banks, and low inflation.
The notion of trading currencies for profit is still a relatively new concept in the United States. This is due in large part to the fact that prior to 1992 FX trading was only available to banks, multinational companies, and very few individual investors for speculative purposes. However, today the daily activity in the Forex market is vastly larger than that of any other marketplace or exchange. Banks, corporations, commercial brokers, governments and private speculators trade foreign currencies around the clock. Payments for exports and imports flow through the global currency market, as well as payments for purchases and sales of assets. Many of the participants in the currency market trade currencies purely for hedging purposes in response to the currency exposures created by their import and export activities, or to offset the financial risks of international holdings.
To fully grasp the concept of Forex, one must have a clear understanding of the abstract qualities of the currency market. Foreign currencies are an “over the counter” product, and not quoted or traded on any specific exchange. “Market Makers”, i.e. banks, foreign currency merchants, or other financial entities, quote Forex prices. There is not a standard fixed contract size, nor are there any standard commission fees or any other additional transaction costs involved. All prices are quoted with a bid and offer price, also known as the spread. The spread may vary depending on market conditions and liquidity, and other factors, such as supply and demand, among other things. Prices may vary depending on liquidity and are constantly changing.

The Forex market is a 24-hour market that is continuously open in various financial centers around the world. The standard operating hours for the Forex market are 20:00 GMT Sunday through 21:00 GMT Friday. Positions can be opened and closed at any time throughout this time frame. The trading day begins on the Eastern Pacific Rim, with financial centers in Wellington, New Zealand, and Sydney, Australia opening first, followed by Tokyo, Hong Kong, and Singapore. A few hours later, while markets remain active in those Asian centers, trading begins in Bahrain and the Middle East. When the trading day is almost complete in Asia, markets in Europe begin to open for business. The European time zone is the most active market, with about 2/3 of all global Forex transactions being cleared through London. Finally, New York and the North American market begin trading toward the end of the European session. Finally, the circle is complete when, in the North American late afternoon, the next day arrives in the Asia-Pacific market, and the process begins anew. The 24-hour market means that exchange rates and market conditions can change at any time in response to global developments. In this market, investors can react to any economic, social, or political events at the time it occurs.

Forex trading on margin carries a high degree of risk, and may result in serious financial loss. Forex trading is not suitable for everyone. The possibility exists that you may lose some or all of your initial investment – be sure to invest only “risk capital”, and not money you cannot afford to lose.