Forex stands for foreign exchange. It is used to represent the global foreign exchange trading market, which is the largest financial market in the world in terms of currency exchanged.
The foreign exchange market blossomed in 1971 when currency valuations were allowed to float freely instead of being tied to the U.S. dollar and gold valuation.
Forex is used primarily for speculation and profit although corporations, and governments utilize it to convert profits and payments into other denominations.
The Forex market operates 24 hours a day from 5 p.m. EST Sunday to 5 p.m. EST Friday.
Trading is global and starts each day in Sydney, Australia, and moves across the globe through Tokyo and London, ending in New York.
The Forex market is an over-the-counter (OTC) market. There is no central exchange, and all business is conducted via telephone or electronic networks by individuals, brokers and banks.