Currency trading is supposed to be the largest market on the planet. It is estimated
that in excess of $2 trillion US Dollars (USD) is traded every day. Compare this
to the New York Stock Exchange's daily transactions of approximately $50 billion
USD, and one can see that the magnitude of the currency trading market exceeds all
other equity markets in the world combined.
The practice of currency trading is also commonly referred to as foreign exchange,
Forex or FX for short. All currency has a value relative to other currencies on
the planet. Currency trading uses the purchase and sale of large quantities of currency
to leverage the shifts in relative value into profit.
There are two reasons the relative value of a currency fluctuates. The first is
because of a "real" market: as outside investors or visitors wish to buy things
within a country, they are forced to convert their domestic currency into the currency
of the country in which they are buying. Similarly, as money leaves the country,
people must sell their currency for the foreign currency they will need to spend
or invest abroad.