Also known as online foreign exchange - is the biggest market in the world with its $4000-$5000 billion daily turnover.
FOREX exceeds the size and activity of all stock- and bond markets combined around the globe. In many ways foreign exchange market is the closest to the perfect market theory.
It is based on huge volume of trades, an extremely liquid market, high number of participants, geographical diversity, long trading times (24 hours excluding weekends), the variety of factors of factors influencing exchange rates and their movements and the potential of high returns.
With the spread of high speed internet the popularity of foreign exchange trade has increased. Today it is said to have 50 million active users. Online foreign exchange is enabled by Forex brokerage firms.
FOREX is not part of the stock exchange. It is an “Over The Counter” (OTC) market where brokerage firms are under the supervision of their National Banks and/or Financial Authorities. Brokerage firms provide, with the help of the market marker and liquidity management banks /Citi Bank, UBS, BNP Paribas, Nomura etc/, 5 day - 24 hour real time exchange rate for foreign currency pairs via graphic based software.
The most well known client software is Metatrader /MT4,MT5/ that was developed by Metaquotes Software Corp.