The foreign exchange (FOREX) is the international currency market the most liquid market in the world. It is estimated that volume traded is more than $5 trillion per day. Instrument traded in the FOREX are worldwide currencies. The price of one currency in term of another currency (currency pair) is called exchange rate (cross rate), which sets the price of a currency against another. 85% of Forex trading is concentrated in the major currencies, which are combinations of USD, EUR, GBP, JPY, CAD, CHF, AUD.
It is an over the counter (OTC) market, it is not regulated and not localized in a specific financial center or any physical location. Transactions occur between two parties who exchange each other instruments without ever involving physical delivery, through currencies market intermediaries (brokers, banks). Transaction can be done 24 hours a day from midnight Sunday until Friday afternoon (European time). Being a market that never closes, it allows investors to react better and faster to political, economic, unexpected news events.
Forex offers a leveraged product, this allows the investor with his/her initial deposit to be able to negotiate much higher amounts, because of this the investor can achieve higher profits or losses. By depositing 10.000 USD you are allowed to invest 1.000.000 USD