What is Forex?

The Foreign Exchange Market, also referred as Forex market or FX market, was established between 1971 and 1973, when various central banks around the world introduced a free exchange rate regime, letting the currencies fluctuate driven by the market. Since then, the main participants of the market were Central banks, corporate banks and large institutions. It wasn't until 1997 when trading Forex became available to retail investors through on-line trading platforms and leverage.

In the Forex Market, the money is bought and sold freely; this is the exchange of one currency over another. The Forex Market is the biggest and most liquid financial market in the world, with nearly 2 trillion dollars of turnover on a daily basis. Over 80% of the overall volume is traded in seven major currencies: the US dollar, the Euro, the Japanese Yen, The Swiss Franc, The Great Britain Pound, the Canadian dollar and the Australian dollar.

There is no physical location, where all the volume is traded at. This is called an Over The Counter (OTC) Market, due to the fact that all transactions over the world are conducted via telecommunications (phone, on-line platforms, etc).