"FOREX" and "FX" are simply abbreviations of "foreign exchange" and refer to over-the-counter currency markets. Foreign exchange is the largest and liquid market in the world trading approximately $1.5 trillion every day (that is over 30 times the daily volume of NASDAQ and NYSE combined). The FOREX market are traded directly between banks, foreign currency dealers and forex investors wishing either to diversify, speculate or hedge foreign currency risk. The FOREX market is not a "market" in the traditional sense because there is no centralized location for FX trading activity and, therefore, trades placed in the FOREX market are considered over-the-counter (OTC). FOREX trading provides business opportunities between parties which occurs through computer terminals, exchanges and over telephones at thousands of locations worldwide.
Until recently, the FOREX market was not available to the small speculator, this market was confined to larger traders: major international commercial and investment banks; international corporations; national and mulitnational companies; corporate members, international money brokers; currency traders etc. The large minimum foreign currency transaction sizes and financial requirements left this market in the hands of large FX speculators. Now, with the ability to leverage large positions with a relatively small amount of capital (margin), the online forex trading market is now liquid than ever and available to every one.
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