The foreign exchange (currency or Forex or FX) market supposes the trading of one currency against another. Actually Forex is the largest financial market in the world. A daily average turnover is approximately $2 trillion (while the worldwide daily market for equities is roughly $50 billion, and the daily notional value of contracts traded at global futures markets amounts to something near $30 billion). The free-floating currency system began in 1973, and was officially mandated in 1978. And online trading began in the mid to late 1990's
The absence of physical location or central exchange is another peculiarity of the Forex market. It's an over-the-counter (OTC), or "Interbank" market as traditionally, Forex market participants have always included major international commercial and investment banks, large multinational corporations, governments, global money managers, currency dealers, and international money brokers. Small speculators or retail traders have no impact on this market as they may only participate indirectly through brokers or banks and may be targets of Forex scams.
 The currency exchange market operates 24-hour, 5 days a week. Every major time zone has dealers. Trading begins Monday morning in Sydney (which corresponds to 3pm EST, Sunday) and then daily moves around the globe through the various trading centers until closing Friday evening at 4:30pm EST in New York. The major dealing centers today are: London, with about 30% of the market, New York, with 20%, Tokyo, with 12%, Zurich, Frankfurt, Hong Kong and Singapore, with about 7% each, followed by Paris and Sydney with 3% each. These financial centers are linked to one another in a unified, cohesive, international market, so at any given time, around the clock, there's a major financial center open where banks, hedge funds, international corporations, and individual speculators all over the world are conducting business.
The Forex market is rather unique because of:
- the trading volume;
- the market’s extraordinary liquidity;
- variety of and the large number of market participants;
- the absence of steady physical location;
- its long trading hours – 24 hours a day (except on weekends);
- the diversity of factors that affect exchange rates.
A daily average turnover in foreign exchange market is approximately $2 trillion. It has the following percentage:
- 52,5 % in Forex swaps;
- 32% spot;
- 10,5 % in outright forwards;
- 5 % in FX options.
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