Trading currency online is happening literally 24 hours a day, with money exchanging hands almost constantly, to the tune of roughly $2 trillion a day. In comparison to the $20 billion average day of the stock market, the Forex market is without question much larger.

The biggest difference is that on the Forex market there isn't any tangible material that is being bought or sold. There are also no certificates being issued to show how much an individual owns of another country's money.

What is Forex Trading

In the Forex market all the trades are performed electronically and the currencies are traded in pairs, such as the US dollar being paired with the UK's Euro. A trade  primarily consists of trading a specific amount of USD/EURO for currency pairs from two other countries contained within one transaction.

There are also no brokerage fees involved for buying and selling on the Forex market with broker earning their money on the difference between the bid/sell/buy price (ie - the spread) of the currency at the time the trade is completed.

On the Forex market, a buyer of any particular currency pair is basically indicating their confidence in the economy of that particular country. If the economy improves after a buy is completed, and the value of their currency also improves corresponding to the value of other countries, the investment of the buyer increases in value as well. On the other side of that coin, if that particular economy falls, the value of the currency will also decrease on the open market.