Currency trading or Forex is short for foreign currency exchange market, and it refers to the direct trading of foreign currencies.

Forex is a virtual network of currency dealers and banks who are connected by means of telecommunications. This interbank market was originally created in 1971 when international trade changed from fixed to floating exchange rates. The currency trading market market is open 24 hours a day and the currency exchange operations are conducted Monday through Friday.

Forex is a worldwide market, so while you are asleep in the United States, traderss in Europe can be trading currencies with their Japanese counterparts. It is the largest financial market in the world, with the equivalent of over $3-4 trillion changing hands daily compared to traded volume on the stock markets which is only $500 billion (US). Forex is part of the bank-to-bank currency market which is known as the 24-hour interbank market.

Forex trading by individuals is becoming more prevalent every day and it is an exciting and fast-moving market. Transactions are conducted within seconds online and the currency markets move quickly and take new directions all the time. Forex markets are not based in one place but are conducted electronically through a world wide communications network. Trading in online Forex means that when you are investing in foreign exchange, you buy one currency and simultaneously sell another currency. Trading occurs electronically through computer terminals at thousands of established locations, as well as within trading businesses worldwide.