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1. Forex (Foreign Exchange) is the largest currency market in the world, with transactions
exceeding $ 3.5 trillion daily. Comparing the various trading markets, the Forex market is 100
times larger than the NYSE, and is three times as large as the bond market and equities market
combined. Forex is an OTC market (there is no central place of business), which means that
transactions are made via telephone or via the Internet through a global, decentralized network
of banks, multinational corporations, importers and exporters, brokers and sellers of swaps.
This is unlike, for example, the NYSE, which has a central location where trading takes place.
Basics of Currency Markets and the Forex ( Courtesy of HenryLiuForex.com )

2. Millions of dealers around the
world with different training,
initial capital, age or available
time are trading and earning the
Foreign Exchange Market (Forex),
the Futures market, the CFD
(Contracts for Difference) markets
and other global financial markets
by simply pressing a few keys on
the computer and sending orders
via the Internet. The turnover of
the Forex market has reached
record amounts exceeding 3
billion dollars, a number much
higher than comparable indexes of
major stock exchanges in the US.
The Market for International Exchange (Forex or FX) is the space in which takes place the
trading of currencies. In this space banks and various other institutions are facilitating the
buying and selling of foreign currencies. As a rule, major currencies, such as the British Pound
(GBP), the Euro (EUR), the Japanese Yen (JPY), and the Swiss Franc (CHF) are traded against
the U.S. dollar (USD). The pairs trading, where the USD is not part of the pair, are called cross
pairs (cross currency pairs), and occur much less frequently.
Basics of Currency Markets and the Forex ( Courtesy of HenryLiuForex.com )

3. The currency exchange pairs are expressed
with the base currency (e.g. USD) being
the first currency in the pair, followed by
the bid currency. For example, USD/JPY
would be a currency exchange pair with
the American dollar as the basis, versus
the Japanese yen as the bid currency.
The currency exchange pair is associated
with an exchange ratio which would be
expressed in the following format for a
hypothetical EUR/USD currency exchange
pair: EUR/USD: 1.2836 1.2839. The first
number in the series represents the offer
price, the cost of selling the euro against
the dollar, or going 'short' versus the Euro.
The second number is the bid price, the
cost of buying the euro against the dollar.
The difference between the ‘sell’ and ‘buy’
prices is called the negotiation spread (pip
spread).
Basics of Currency Markets and the Forex ( Courtesy of HenryLiuForex.com )

4. The ‘pip’ is the smallest unit of measurement for
any currency. For most currencies, this is the fifth
decimal digit. In dollars, each pip is equivalent to
one hundredth of a penny. There is a significant
difference with the Japanese yen, for which each
pip is the second digit after the decimal
point, making each Yen pip equal to one ‘cent’.
There are several benefits and advantages to
trading in Forex. Below are some of the reasons
why many have chosen this currency market as a
preferred business opportunity:
1. Leverage
2. Liquidity
3. Ability to Increase Profits and Reduce Rates
4. 24 Hour availability
5. Low barriers to entry ("Small Trading")
6. A variety of automated trading tools
7. Low transaction costs
8. Market Volatility
Basics of Currency Markets and the Forex ( Courtesy of HenryLiuForex.com )