Forex is the process of trading one currency with another from a different country. The currency markets are the largest and most actively traded financial markets in the world with the majority of trading concentrated around the major financial centers like New York, London, and Tokyo. Most Forex trading is carried out by large financial institutions such as banks, large corporations, and hedge funds. For this reason, it is not recommended for amateur traders.
There are many currencies in the world that can be traded but the Forex markets are dominated by the US Dollar (USD), Euro (EUR), British Pound (GBP), and the Japanese Yen (JPY). A trade on the Forex market involves the exchange between two currencies known as a "currency pair". The USD is the most actively traded and pairs involving the dollar make up most of the transactions.