Foreign exchange is the simultaneous buying of one currency and selling of another. Currencies are traded through a broker or dealer and are executed in currency pairs; for example, the Euro and the US dollar ( EUR / USD ) or the British pound and the Japanese yen ( GBP / JPY ). The Foreign Exchange Market ( FOREX ) is the largest financial market in the world, with a daily volume of over $4 trillion. This is more than three times the total amount of the stocks and futures markets combined. Unlike other financial markets, the FOREX spot market has neither a physical location nor a central exchange. It operates through an electronic network of banks, corporations, and individuals trading one currency for another. The lack of a physical exchange enables the FOREX market to operate on a 24 - hour basis, spanning from one time zone to another across the major financial centers. This fact - that there is no centralized exchange - is important to keep in mind as it permeates all aspects of the FOREX experience.