The foreign exchange (also known as "Forex" or "FX") market is an international market where various currency exchange transactions take place. In simple terms, Forex trading is the buying of one currency and the selling of another. The Forex market is the largest, most liquid market in the world with an average traded value that exceeds $1.9 trillion per day.

There is no central marketplace for currency exchange whereas all trades are conducted over-the-counter. The Forex is open 24 hours a day, five days a week.

The most frequently traded currencies are referred to as “Majors” which represent over 85% of daily transactions on Forex trading. These seven currencies are the US Currency (Dollar, USD), Japanese Yen (JPY), Euro (EUR), British Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD) and Australian Dollar (AUD).

Benefits:

24-hour trading
The main advantage of the Forex market is that it is a true 24-hour market. No matter what time it is, there are always buyers and sellers somewhere in the world actively trading Forex. In this way, investors can respond to breaking news immediately.

Liquidity
The Forex market is more liquid than any other market in the world because there are always broker/dealers willing to buy or sell currencies. The Forex liquidity, particularly for major currencies, helps ensure price stability that enables investors to always open or close a position, receive a fair market price, and more importantly be less vulnerable to liquidity risk.

Increase in leverage
Leveraged trading, also referred to as margin trading, allow investors in the Forex market to execute trades up to $100,000 with an initial margin of only $1,000. It is important to remember that higher gearing creates greater profits if one correctly anticipates movements in Forex prices and vice versa.

Lower transaction costs
Forex market is much more cost efficient to invest in terms of both commissions and transaction fees. In general, the width of the spread in a FX transaction is less than 1/10 as wide as a stock transaction.