Forex, also known as FX, short for foreign exchange, represents a global decentralized market where currency trading occurs. Currencies are traded in pairs such as EURUSD and USDJPY, with exchange rates determined by the buying and selling of one currency for another.

The forex market stands as the largest and most liquid financial market globally, boasting the highest daily trading volume. While banks and institutions constitute a significant portion of the market, retail traders can engage in speculation on currency price movements, aiming to generate profits.

When trading forex through an online broker, you're not trading the underlying asset itself. Instead, you're forecasting price fluctuations in the currency pair you're trading.